For the beginning, we should be confident that cryptocurrencies are here to stay no matter what. They will continue to exist as soon as the internet is there – and we know that we cannot give up the internet.

The worst case scenario is that the crypto space gets a generous share of the financial industry and goes on in parallel with fiat currencies, commodities, company stocks, and other financial instruments. However, if we look deeper into the crypto’s evolution, we can see that the market is growing at a fast pace and has great ambition to expand its size. When the governments around the world come with adequate regulation for this emerging market, the crypto industry will start growing naturally, as accredited and retail investors will become more confident in the space.

Thus, there is a best-case scenario for cryptocurrencies, and it says that they are about to replace the current fiat currencies. What’s more important is that this best case scenario is actually the most probable scenario. It won’t happen in the next five years, but in the long-term – it’s unavoidable. The countries around the world will have digital currencies rather than fiat money – that’s inevitable.

Maybe the future cryptocurrencies to be used as a legal means of payment will be issued by central banks and won’t allow any degree of anonymity, but they will still be cryptocurrencies underpinned by some kind of distributed ledger technology (DLT), of which blockchain is the most popular type.

Today, it is too early to think that central banks are ready to make such a step, but some of them have already hinted that they might issue some form of digital currency. Thus, Russian officials suggested that the country might release a state-backed cryptocurrency called CryptoRuble. Elsewhere, the Monetary Authority of Singapore (MAS), which is the central bank and main financial regulator of the Asian fintech hub, said that it was working on a state-issued digital currency. This event should be the culmination of the Project Ubin, a five-stage initiative that leverages blockchain technology for various use cases.

Moreover, there are countries that have already issued their own digital currency to replace the national fiat currency. Thus, Venezuela presented its Petro coin at the beginning of October 2018. President Nicolas Maduro said that anyone in the country could buy Petro coins with US dollars, euro, Bitcoin, Ethereum or the national currency called Bolivar. The move comes amid a financial crisis that collapsed the national currency, which crashed from $10 per Bolivar to about $250k.

(USD/Venezuelan Bolivar)

Even though the experts warned about some red flags related to the Petro, which had a $5 billion initial coin offering (ICO) several months ago, it is still an example of a government issuing a cryptocurrency to be used as national money.

Earlier, the Bank of England required a research group to explore the possibility of launching a digital coin backed by the Pound, but it later gave up the plan.

Some investors are quite bullish on the crypto’s future. For example, venture capitalist Tim Draper said that cryptocurrencies would replace fiat money in five years.

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Posted by Min Park

Blockchain Marketing Consultant

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