As new technologies spread across the globe, more and more industries are being affected in ways that no one could have ever imaged. Today, peer to peer networks, or P2P as they are sometimes referred to, have revolutionised everything from music to communications, and the banking industry is no different.
Today, banks fear that this new technology may make them obsolete. This is because, in the past few years, P2P networks have sprung up for the specific goal of trading currency. Just like a regular currency exchange, you can trade dollars for euros, sterling for rubles, or any other combination you can imagine. And it’s all completely anonymous. The network matches a seller to buyer and then works to move the funds between them with the currency exchange as the middle man. No bank is ever needed.
In the event that a buyer isn’t found, the exchange will use a bank itself to cover the trade. However, in this new system, any trade goes, from the very minor to the titanic, trending upwards of £1 million and beyond. In the blink of an eye, the P2P exchanges are transferring almost unthinkable amounts of money from one end of the Earth to the other. For traders, this flexibility and the vastness of the network provide more options for trade size.
While some P2P exchanges receive authorisation from regulatory bodies such as the Financial Conduct Authority in the UK or its equivalents abroad, many remain unimpeded by government or financial oversight. What this means for many traders is that instead of paying the hefty commissions they’re used to with brokers or traditional banks, they’re able to make better deals and keep more of their money when a deal goes well. Though P2P exchanges also charge fees, these fees are much smaller than any other investment vehicle, as low as 0.5pc in some cases. Which exchange is right for you will be a matter of whether you’re interested in micro-trades or larger monetary amounts.
Anonymity is assured
One of the biggest pluses about P2P currency trading is that it gives each individual the power to remain nameless and faceless. In a world where privacy concerns are growing, this is a positive feature that towers above many other investment choices. There are few banking organisations in the world that can offer such a benefit to their customers. At the end of the day, it’s your money and your privacy.
Finding the right exchange for you
Same-day trades are available in many cases, but cost a premium. For this reason, many traders choose to do the standard one to two day trades. While some exchanges might not offer the same amount of trade options as regular banks, shopping around will allow you to find exactly what you need. Check each P2P exchange to determine which one will meet your needs the best. Choices like the international money exchange by midpoint.com are constantly adding new currencies to give their customers an even wider range of currencies to trade.
Even though no one can see into the future, many investors are confident that this trading trend isn’t just be here to stay, but that it will continue to grow. Because of the value that P2P currency trading offers, this new industry is likely to add more options in the coming years as more and more traders make the switch. It’s likely that as traders make the change, traditional banks will become less and less relevant.