FXPay: From the gold standard to the forex on the blockroom

Forex is the largest financial market in the world. The crypto-currency market is one of the fastest growing and progressively developing ones. Why not combine the capabilities of the two industries? Today we will talk about FXPay - a solution for the forex market based on blockbuster and smart contracts.

The forex market in our days

So, what do we know about the forex market? The name Forex is an abbreviation of the English Foreign Exchange, which denotes the international market for the exchange of currencies at current market or free price quotations, that is, without any restrictions or fixed values. Forex (FX, FX) means margin trading in the currency through the relevant banking institutions or dealing centers. 

In addition to the fact that the forex market is the largest market in the world, it is also relatively young. The appearance of Forex (foreign exchange) is associated with the advent of the Jamaican currency system, which provides for the binding of the national currency to the dollar or gold. The gold and currency system was replaced by freely floating exchange rates, so the countries refused to determine the value of currencies based on their gold standard.

Advantages and disadvantages

Forex became one of the first decentralized markets. Exchange transactions with national currencies do not occur through any one centralized exchange, but between traders. The market itself includes four main players:

• The main banks through which operations on the exchange of national currencies take place;
• Liquidity providers, which are interbank institutions;
• Traders are personal participants of the forex market, who directly exchange currencies;
• Brokers are smaller banks that mediate between traders and liquidity providers, making transactions on behalf of traders.

Despite the fact that the forex market has given many investors the opportunity to make really effective and profitable investments, today its participants still face a number of problems and barriers. The first of them is a rather widespread problem of overstated commissions, in connection with which traders, brokers and liquidity providers have thresholds for entry and exit from the market, that is, for investment and withdrawal of funds.

Traditionally, commissions reach 5-7% per transaction. Many investors lose a significant part of their investments and potential profits, but for others such thresholds become completely insurmountable. The problem is that the forex market tangibly lacks the general standardization and coordination between brokers and traders.

The second big disadvantage of forex trading is the complexity of the exchange operations and, as a result, the procedure of exchanging one national currency for another is too long in time. Do not forget that marginal trading within the forex market is carried out from the leverage, that is, using not only personal capital, but also borrowed funds, which allows you to increase the size and, accordingly, the profit of exchange transactions.

Forex and blockbuster

Today we are talking about the ratio of two dynamic markets - the international exchange of national currencies (forex) and the market of crypto-currencies. The thing is that for the past 40 years the daily turnover of the Forex market has increased by as much as 1000 times. If in 1977 the turnover was about $ 5 billion, today this figure reaches $ 5.4 trillion. For comparison: the young crypto-currency market for almost 10 years of its existence grew to a mark of daily turnover of $ 4.8 billion, which is about 1125 times less than forex. 

But starting next year, the situation should radically change for the better for both markets. Developers of the company FXPay Inc. decided to combine the opportunities of forex and crypto currency to create a single truly effective and profitable solution. As a result, FXPay will allow traders, brokers and liquidity providers to participate in the international exchange market without barriers in the form of high commissions, thresholds and long transactions.

The creators of FXPay decided to launch their own FXP crypto currency (ERC20 standard token) and build an entire ecosystem around it, within which the technology of blocking and smart contracts will be integrated into the forex market. Thanks to this, the developers of FXPay will be able to build an efficient and profitable solution with a higher transaction speed, lower fees and a lack of serious risks.

Read the next part of the review to find out what the FXPay solution is.

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