Until now, cryptocurrencies only played a supporting role in the global monetary market. But before the next decade ends, this may change. If regulatory problems are something to deal with quickly, there are no other serious obstacles for the digital currencies to replace old-fashioned cash before the end of the new 20s.
Today the fiat money system is starting to look increasingly fragile, while demand for alternatives is growing faster than we expected even several years ago. In a recent report by Deutsche Bank “Imagine 2030”, experts argue that the world is standing on the brink of the fiat-to-crypto switch, and China might be leading the way as a country that fully recognizes the trend.
So is cryptocurrency destined to replace all national currencies? Let’s dig into it a little bit deeper.
Cryptocurrency VS National currency
It seems like banks and governments are sharing at least one common goal – to eliminate cash. But while governments are more concerned with cash in the context of fighting with the black economy, financial institutions just want to use technology to facilitate all sorts of convenient cashless payments. According to Deutsche Bank, for the future of cryptocurrencies, we should look closely into the two most populous countries in the world.
Until now, India and China were banning the operations with cryptocurrencies, but things are about to change. Recently the Chinese government started to endorse blockchain technology calling it “an important breakthrough for independent innovation.” The People’s Bank of China voiced the intention to replace cash by a central bank-issued digital currency (CBDC) to promote yuan’s circulation and internationalization. Moreover, taking into account the labor pool of the Chinese economy, more than 770 million people, the number of financial transactions for crypto will increase dramatically. If a CBDC (Central bank digital currency) currency proves to be successful in a country the size of China, it will become a major cornerstone for cryptocurrencies and speed up the process of the blockchain adoption in other countries.
So who will win in a battle of crypto currency VS national currency? It seems like this is no longer a valid question; instead, this is the question of when and how. When this occurs, the line between public & private sectors, cryptocurrencies, and financial institutions will be forever blurred.