Hi hivers, if you are looking for information regarding "KYC in Crypto vs Traditional Finance," then you have landed in the right place. KYC is a key in the financial world why because based on that, a centralized system takes control in hand. KYC means know your customer, in which the customer has to submit address proof, identity proof, and income details. If they submit such proofs, they are allowed to open the bank accounts. KYC's only aim is to protect against scams and fraud; also, it works best for the money laundering issue. All the centralized systems and banks rely on the know your customer.
So what type of documents are required? For example, if you want to register an account, then you can submit a voter ID card, a PAN card, a driving license, or a passport. You can also submit an electricity bill or else voter ID card as address proof. So you can see KYC is there for protecting privacy, but here they are collecting your sensitive data, which is not good.
Centralized crypto exchanges are also going this way and collect sensitive data of users, but digital identity verification is taking place, and when there is decentralization, then you don't need to submit any documents. So when we check the centralized cryptocurrency exchanges, they are working the same as traditional finance, so here we are not getting the real benefit of crypto, which is the decentralization. There is one difference in crypto exchanges' KYC, and that is balancing regulation and freedom, and this is good, but not provide the full benefit like decentralized exchanges.
So these are the things guys and I hope you understand the information. KYC is still a debatable topic, but you can give your point of view below. Show your support by sharing this information on social media sites, and also follow me on Hive. Now I am signing off.
