Is the End of Cash and Age of Crypto Coming By 2030?
By Space Coast Daily // April 8, 2022
As the previous decade ended a month ago, it was fascinating to see how far banking, financial, and technology had progressed. We did not have Stripe or Square, nor did we have 4G, and the iPad was still a concept. However, Bitcoin was available at the turn of the last decade.
Finance and payments are dynamic industries. Golden gallons and shards of silver have been phased out in favor of paper notes and then plastic cards. The digital age has undoubtedly accelerated the pace at which we use and comprehend money. Additionally, we are on the verge of another financial revolution linked to the fourth industrial revolution.
Blockchain technology, AI, IoT, and a slew of other technologies are beginning to permeate our lives, and older, more conventional approaches and technologies are scrambling to keep up or risk extinction. Cryptocurrencies have emerged because of this technological revolution.
Despite being older than the iPad, cryptocurrency has only recently entered the mainstream, but its impact is already being felt. The surge in interest in digital currencies has spread to numerous banks – including JP Morgan and Wells Fargo, which are developing their cryptos tokens – and large corporations and even government agencies.
However, the question that keeps cropping up is when will cryptocurrencies take center stage and supplant cash, which is already considered obsolete in countries such as Sweden. Deutsche Bank is one bank that has a vested interest in remaining relevant following massive job cuts.
The bank forecasts that the current fiat financial system will grind to a halt in the next decade, paving the way for something new, such as cryptocurrency.
Is cash on its way out?
The Deutsche Bank survey on the long-term future of finance in the next decade devotes considerable time to the possibility of cryptocurrencies. They note that while this industry has historically been viewed as an addition to, rather than a replacement for, the global money supply, this perception may change considering the future of cash – and cards.
Cryptocurrencies have always been complementary to, rather than substitutes for, the global money supply, the report states. Despite their well-known advantages, such as security, speed, low transaction fees, ease of storage, and relevance in the digital era, they have not taken off as a payment method.
Thus, while cash is in a precarious position for the next decade, which benefits cryptocurrencies, some critical issues must be resolved if cryptocurrency is to succeed in replacing the current cash status quo.
Cryptocurrencies must overcome three major roadblocks in order to gain widespread adoption. To begin, they must establish legitimacy with governments and regulators. This entails establishing price stability and providing benefits to both merchants and consumers. Additionally, they must account for global reach in the payment market. To accomplish this, alliances with key stakeholders – mobile applications such as Apple Pay and Google Pay, card providers such as Visa and Mastercard, and retailers such as Amazon and Walmart – must be formed.
Naturally, some of this is already underway, with Walmart, for instance, expressing interest in blockchain technology. This is for its supply chains and has nothing to do with Bitcoin, but it serves as a steppingstone for the next decade.
However, overcoming those three obstacles will not be easy; according to the bank, new obstacles will arise due to the future popularity of cryptocurrency and the decline of cash.
Unless these obstacles are overcome, the ultimate future of cash is jeopardised. However, new difficulties would arise. To begin, it will entail entirely relying on electricity consumption to support a robust financial system. To guarantee a smooth and hassles free transition to a fully digital platform, the financial system must be prepared to withstand any type of power outage or cyberattack. Governments may increasingly be required to store backups of citizens’ data in a secure location. Estonia, for example, chose Luxembourg as the location for a comprehensive backup of government data, including information about its citizens’ health, population, and business registrations, as well as a data embassy.
Outstanding Growth of CBDCs
The future of cryptocurrencies may be more than we currently know in 2020. Interest in the possibility of central banks releasing their cryptocurrencies – dubbed Central Bank Digital Currencies – has exploded (CBDCs).
Many, particularly government officials, believe that these meet the criteria for being both regulated and controlled but overlook the benefits of a new digital era. Indeed, at the recently concluded World Economic Forum in Davos, a new policy toolkit for expanding these CBDCs was unveiled.
Central banks the size of England recognize that if governance can be acquired and standardized, the doors to these digital currencies can genuinely open.
Governance is the bedrock of any form of digital currency, Bank of England Governor Mark Carney stated. Any framework governing digital currencies must ensure the security, efficiency, and legitimacy of payments while also promoting fair and open competition. We appreciate the World Economic Forum’s initiative to assist in the development of a strong governance structure for digital currency inclusion.