The <a href="https://www.investopedia.com/terms/g/great-recession.asp">2008 recession</a> is perhaps the most significant financial crisis ever. While the problem ended years ago, the topic has continued to be discussed by experts and analysts now and then. Analysts say that there are several factors credited for causing the 2008 recession. Among them include <a href="https://www.thebalance.com/what-caused-2008-global-financial-crisis-3306176">loose lending standards</a>, securitization, and deregulation of the financial space.

However, barely a year after the recession, a new financial system, the <a href="https://www.cryptoknowmics.com/news/crypto-exchange-bybit-launches-crypto-options-trading/" target="_blank" rel="noopener">crypto</a> space, was born with the launch of bitcoin. Bitcoin and crypto enthusiasts claim that the crypto space can bring solutions to financial problems. In fact, in the past, the crypto space has proven resilient even in cases of financial struggles.  

For instance, in 2020, when the Covid 19 pandemic started, the financial world faced some problems. However, a few months later, the Crypto space continued to surge. Hence, it's well established that crypto can survive financial problems, including recessions. This guide discusses four ways crypto can circumvent its economic problems and avoid recessions.
<h2>Crypto Can Foster Genuine Trust in Institutions</h2>
One issue that slightly contributed to the 2008 recession crisis is society's high trust in financial institutions like banks. At this time, the community had too much faith in financial institutions and how they handled their activities like record keeping and other practices.

But, too much trust led banks to do shady work. In 2008 some bankers manipulated their ledgers to make gains in the future. A few months before Lehman Brothers folded, they recorded $4 billion in earnings. Lehman hid its financial problems by just using shady accounting practices. The trust led to a financial crisis. Banking institutions also had poor lending standards.  

However, while being decentralized, the crypto space is still highly trustworthy. Blockchains use nodes to approve transactions before they are included in the ledger. All nodes must agree to include a transaction. If there are any disagreements in approving nodes, the transaction could be ineligible.

Moreover, blockchains are immutable ledgers, meaning no one can delete or change data once added. Therefore, it's almost impossible for anyone to do shady record-keeping on the blockchain. 
<h2>Crypto Offers More Transparency </h2>
Another issue associated with the recession in 2008 is the lack of transparency. As mentioned already, banks were never transparent with how they handled their ledgers. For instance, there are reports that many banks were never transparent.

But, the crypto space can help circumvent future crises due to its<a href="https://etorox.com/news/opinions/are-cryptocurrencies-a-solution-to-combating-recession-in-the-conventional-financial-system/"> transparent</a> nature. For instance, blockchains are transparent and immutable. Such transparency and immutability will stop banks from committing frauds, as many did in 2008.

In this case, central banks no longer have to go to each bank to follow their records. Instead, relevant authorities can trace this ledger data, preventing such a financial crisis. The deregulation before the 2008 crisis could be controlled by blockchain.
<h2>Crypto Space can Decentralize Financial Services</h2>
Another problem that led to the 2008 financial crisis was the centralization of financial services. For years, central banks have maintained massive control over the entire economic world. 

The central bank sets policies like interest rates and others that vastly impact the economy. For instance, reducing interests could lead to more borrowings and mortgages. As happened in 2008, minimizing the lending requirements can result in heavy borrowing and, later, a crisis.

Central banks will often combine a comprehensive collection of policies to achieve their tasks by either manipulating interest rates or the money supply. Sometimes, they may lead to more or less money in circulation, leading to recession. 

However, crypto eliminates the need for centralization of all those services. Creating and distributing the currency is often simple, unlike central banks. Crypto has proper ways to improve scarcity but maintain the availability balance of cash in the economy.

Even the process of making decisions is distributed. Some platforms use <a href="https://www.cryptoknowmics.com/news/daos-are-decentralized-organizations-are-they-actually-so">DAO </a>governance to decide the future of the project. By distributing tasks, the blockchain and crypto space can easily circumvent crises.
<h2>Crypto Stops Counterfeiting</h2>
One issue associated with central banks is the possibility of counterfeits. The primary role of Central banks is to issue the country's currency in the form of paper money. Paper money has been used for ages, but there is always one problem, counterfeiting. It's effortless for criminals to create fake versions of paper money. 

Counterfeiting hurts the value of a currency leading to devaluation or inflation. The depreciation may go so high as to cause hyperinflation, unemployment, and financial crisis.

However, crypto completely circumvents counterfeiting. Crypto is based on blockchains which ensure counterfeiting is impossible. For instance, blockchain makes it impossible to double-spend. Moreover, each asset is unique, meaning it can never be replicated. Hence, you can never double-spend or counterfeit cryptocurrencies.
<h2>Can Crypto Circumvent Financial Crises</h2>
The issues that led to problems in the 2008 financial crisis could all be solved by involving crypto, blockchain, and <a href="https://www.cryptoknowmics.com/news/reasons-why-cbdcs-are-not-for-the-greater-good-of-the-people">CBDCs.</a> The poor lending standards and deregulation were the leading causes of the problems. While the blockchain space can be said to be less regulated, its transparency can quickly help protect against any recession. Hence, considering the several reasons highlighted above, it's clear that crypto can help circumvent recessions.

Unlike the 2008 Recession, Here Are 4 Ways Crypto can Circumvent its Woes

Check out in depth about the 4 Ways Crypto can Circumvent its Woes unlike the 2008 significant financial crisisr recession.

Adam is an outgoing young lad who likes adventures and discovering new things.Despite his boring life, he loves writing about cryptocurrencies and exploring what blockchain technology can do for the coming digital world where all adventures will be virtual.

Unlike the 2008 Recession, Here Are 4 Ways Crypto can Circumvent its Woes

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