The money market is a part of the financial system in which borrowers and lenders met at one place to complete the transaction on a specific number of terms and conditions. This money market is related to the physical and virtual financial system. In the physical money market, the central bank is involved while in the virtual money market the cryptocurrency market is involved.
At this time there are two financial systems that are working side by side. One is the banking financial system which is centralized and regulated by a number of authorities. Despite that, the other is a blockchain system that is decentralized and not regulated by any competent authority.
In the centralized system, the money is circulated, lent, and borrowed under terms and conditions and checked and verify by the central bank. The central bank is the supreme power in this system and makes and implements the policies that are implemented by the subsidiary banks. In this scenario, the subsidiary bank does not cross the line issued by the central bank and follows the rules. They do not give full access to their depositor account of their assets. The public has limited access to the assets that are accumulated in the bank.
A decentralized market refers to a blockchain system. That runs the money market on a smart contract run by intelligent software and no human can interferer it. There is a top cryptocurrency involved in the money market that offers cryptocurrency stocks to the public. The user can lend and borrow money exactly by the smart contract without any overcollateralized. In this approach, the borrower and lender are original using their wallets and having full access to their funds. They can negotiate and make a smart contract to get it beneficial for both of them.
There are some major characteristics that are very useful in the decentralized money market that make him more prominent over other financial systems.
No need for permission from the central authority
The agreement between two persons is not getting permission from any centralized authority. Both parties have full access to their funds and they just need to verify it from the blockchain system to execute the transaction or smart contract. The transaction is executed within the seconds and does not need to wait for a couple of days just like the banking system. You can get the funds in your crypto wallet instantly.
KuCoin crypto exchange provides full control of funds to its users. Well-established dashboard of KuCoin makes it easy for its users to operate. The right person can assess the KuCoin wallet from any part of the world without any permission.
Not over collateral security
Banks are very selfish and demand more collateral security from the investor to lend the funds to him. They also charge heavy interest on them which is very painful for the investor. Despite that, the blockchain system does not require any type of over-collateralized security. Their smart contract demand only the exact amount for collateral security for the ease of the user.
No overall custodian
In a centralized system, the central bank is the custodian of every contact and transaction. However, in a decentralized system, not a single one is the custodian of the cryptocurrency stocks that lies on the blockchain system. The record is made only on the public ledger for the protection and transfer of money. You are also not bound to take any permission from any authority due to the noncustodial feature.
Seamless Communication between elements
Multiple numbers of elements are involved to assist the process of completion of a transaction. These elements need seamless communication between them to perform a transaction without any interruption. This system developed protocols that are helpful for communicating with the next element after the completion of the previous process.
In conclusion, the above discussion is that the cryptocurrency market is the preference for newly engaged users in near future. Users want to get more control over their funds and check up the real-time price of Bitcon, and that is feasible only with the blockchain system. A decentralized blockchain system opens a new era of conducting transactions in the financial system. And this technology is rapidly increasing its users all over the world.