A new study from the Deutsche Bank claims that the demand for alternative currencies could eventually result in fiat being replaced by Bitcoin (BTC) and other cryptocurrencies by 2030.
Bitcoin has been around for more than a decade, but it’s still not considered as a global currency. But in its recent report, the Deutsche Bank claims that BTC and the rest of the cryptocurrencies have the potential to take the place of the current fiat system by 2030.
In its aptly named report, “Imagine 2030,” the bank highlighted the difficulties the present fiat system has faced in the past few years, particularly with the appearance of cryptocurrencies.
Jim Reid, the company’s chief strategist, stated that consumers’ increased demands for anonymity and dematerialized modes of payment could push more people to cryptocurrencies. He also said that the unmanageable inflation and the increase in the price of gold could also contribute to the growing cryptocurrency trend.
The report also explained that for digital assets to receive wider adoption and acceptance, they have to overcome three critical obstacles. One of these hurdles is to be recognized as legitimate by governments and regulators, which includes price stability and provides room for worldwide access in the payments market. Reid said that developing partnerships with important stakeholders, like card providers and mobile apps, will enable it to flourish.
Reid also emphasized that new challenges will appear with mainstream adoption. He also listed several key threats hounding the supposed crypto-based financial system. Some examples he gave were cyberattacks, digital wars, and the reliance on electricity.
According to Reid, the line differentiating digital currencies, financial institutions, the private and public sectors become increasingly blurred.
One of the points raised in the report – the emergence of digital assets – is becoming more robust. Numerous governments have been seriously considering the necessity of having their own digital currencies.
Haruhiko Kuroda on the Topic
Haruhiko Kuroda, the Governor of the Bank of Japan, said early today that there’s no public demand for a central bank digital currency (CBDC) yet. But he also noted the rising insistence for cash payments and said the bank has been doing legal and technical studies into the situation.
The British Virgin Islands is taking the opposite, and largely proactive approach to the issue of CBDC. The country recently announced that it’s developing a cryptocurrency alongside LifeLabs, a blockchain startup. The currency, dubbed BVI-LIFE, is reportedly part of a larger movement to expand the local fintech sector. BVI-Life will eventually be pegged to the dollar.
Meanwhile, France’s central bank is said to have plans to launch a pilot CBDC for financial institutions next year.