Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

What is one advantage of using blockchain in financial transactions?

1. It requires less regulation.

2. It allows for instantaneous transactions globally.

3. It eliminates the need for digital wallets.

4. It guarantees profits for all participants.

The correct answer is: It allows for instantaneous transactions globally.

Using blockchain in financial transactions offers the distinct advantage of allowing for instantaneous transactions globally. This capability stems from the decentralized nature of blockchain technology, which facilitates peer-to-peer interactions without the need for intermediary institutions like banks. As a result, transactions can be executed in real-time, regardless of geographical barriers, making it particularly advantageous for international transfers where traditional banking methods can take several days and incur high fees. In contrast, while regulation is a consideration in blockchain transactions, asserting that it requires less regulation overlooks the fact that regulatory frameworks may still be necessary to ensure security and protect stakeholders. The notion of eliminating the need for digital wallets is also inaccurate, as digital wallets are essential for storing and managing cryptocurrencies. Finally, the idea that blockchain guarantees profits for all participants is misleading because, like any investment, profits depend on market conditions and individual strategies, rather than a certainty offered by the technology itself.