Cryptocurrencies may have gotten to a rough start however it looks like the rough patch may soon come to an end as future of fiat currencies turns bleak.
It appears that fiat currencies’ relatively stable and hedge against recession image is finally coming to a close. Higher inflation rates, burdensome taxation policies and rising concerns over the sustainability of government-backed fiat currencies have started to take a toll and causing people to turn to alternative currencies. Amidst all this, cryptocurrencies and their decentralized framework appeal significantly to people who are awfully tired of excessive government control and exorbitant banking fees.
Fiat currencies to make way for crypto by 2030
The latest Deutsche Bank report, Imagine 2030, offers a glimmer of hope to crypto enthusiasts. As Bloomberg reports, the budding asset class is likely to pick up the pace by 2020, with factors driving fiat currency growth shrinking in force.
Jim Reid, Deutsche Bank analyst and report author, states that the forces keeping fiat currencies together are vulnerable to many risks. If those forces start to backfire, people will soon begin to seek out for alternative options like crypto or gold.
However, making the “big shift” wouldn’t be easy
That said, cryptocurrency adoption will not be an easy task as there are still significant hurdles that this asset class needs to overcome. The first and foremost is earning a legitimate reputation in the eyes of financial regulators and government entities. That could be challenging given the fact that cryptocurrencies are often used for illicit purposes and are known to be extremely volatile.
The second hurdle is the global reach in the payments sector. Reid believes that this could be addressed by establishing strategic partnerships with mobile apps and card companies that currently dominate the market.
Reid points out cyberattacks and dependency on electricity for cryptocurrency mining as a few other challenges that the community needs to deal with before it could see a decent acceptance rate. When the crypto industry gets better control of these alarming issues, the line between financial institutions, digital currencies, the private and public sector will diminish, Reid explained.
In the end, Reid leaves the readers pondering over the question whether the fiat currencies will eventually be able to survive the years-old dilemma that policymakers continue to face, and that is to strike the right balance between higher yields and record level debts.
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