Fintech refers to the dynamic intersection of financial services and technology. The rapid development of digital payment guidelines, policies, and capabilities has substantially transformed the payments ecosystem and will not be slowing down any time soon. The ever-revolutionizing fintech industry opens up significant opportunities and simplifies business procedures. Transactions, purchases, banking, saving, and investment processes have all seen drastic changes during the past few decades, thanks to the advancements in the tech industry.
Though the rapidly evolving FinTech industry offers numerous potential benefits, it also makes it critical for entrepreneurs and businesses to remain at the forefront as the payment ecosystem keeps expanding, and to adapt their businesses to align with the emerging trends that are reshaping the industry. This is where digital assets come in.
Digital assets are in the older asset category and were established over a decade prior to cryptocurrencies. Our daily digital assets include Netflix streams, cloud photos and videos, documents, and a lot more. These digital assets can be defined as a collection of binary data that is self-contained, valuable, have unique identifiers, and does not stem from the base of a non-digital commodity.
Digital assets surround us, and their significance is increasing every day. Moreover, global economies are heavily reliant on the digital sector, as digital assets have virtually limitless development potential in a society with limited resources.
A new economic paradigm is already emerging as digital assets such as blockchain, Artificial Intelligence (AI), Internet of Things (IoT), and Augmented Reality (AR) combine with other aspects of the industrial revolution, including 5G, robotics, 3D printing, and drones. This has opened the space for a digital asset that will serve as a global standard with a universal benchmark and value store. The Central Bank of France and Libra’s (by Meta) plans to test and explore digital currencies are among the active initiatives in the digital asset landscape.
Personal digital assets include a variety of items, some of which are:
- NFTs
NFTs have emerged as the new foundation of the digital economy in the investment ecosystem. One of the recently trending digital assets is NFTs, or Non-Fungible Tokens, which are similar to real-life art projects. This can include music, art, movies, pictures, or gaming avatars. An NFT has a certificate of authenticity produced by blockchain technology that underpins several cryptocurrencies. Since their inception, NFTs have adapted to the fintech industry’s revolution and have become an alternative means of purchasing and trading digital artwork.
- Blockchain
Technological solutions that enable digital assets are called blockchains. A peer-to-peer network may securely store information via a blockchain. It is a replicated public database that is shared by many computers and in which new entries can be added but not current entries changed.
Industries are heavily utilizing blockchain in a variety of areas, including insurance, funds, and stock trading. Blockchain has decentralized and reduced the risk of massive economic crisis with the aid of machine learning, Big Data, and Artificial Intelligence. It has also laid the groundwork for emerging technologies in the digital finance industry as it offers invisibility, transparency, and data protection.
- Cryptocurrency:
The MENA region has made significant advancements in digital assets with a host of new legal measures, and cryptocurrencies have become widely accepted in a very brief span of time. Governments are taking the lead by implementing new laws since they recognize that these digital assets will continue to increase in value.
For example, Dubai formed the Virtual Asset Regulatory Authority and passed new legislation to control virtual assets like bitcoin and non-fungible tokens, or NFTs. These actions clearly aim to legitimize a budding sector and pave the way for expansion. Similarly, the global crypto exchange FTX successfully obtained permission to operate in the UAE.
Each of these digital assets comes with its own uses and applications. Below is a list of some of the most popular application along with their usage.
Digital assets can change ownership in decentralized networks without the need for middlemen, facilitating quicker and more affordable transactions, even on a global scale. Hence, the conversion of physical goods into digital assets through tokenization has the potential to dramatically transform how we trade value. In this decade, digital assets are anticipated to be the primary driver of sustainable economic growth.
As digital assets become more ingrained in the world’s financial systems and continue disrupting the fintech industry, keeping up with the most recent changes in the digital asset’s policies and regulations has become crucial for ecosystem players to take the lead in the fintech industry.