According to recent research from Deutsche Bank, demand for alternative currencies will grow by 2030. With digital currencies eventually replacing the money.
Deutsche Bank strategist Jim Reid raised awareness in the “Imagine 2030” study of the difficulties. That the current fiat system has faced in recent years, especially with the advent of cryptocurrencies. Reid stipulated that the increased demand for dematerialized means of payment by people. Anonymity could drive more people into digital currencies.
Mainstream adoption & co-occurring challenges
Online resources need to clear three major hurdles to achieve wider acceptance. These include assumed legitimacy in the eyes of policymakers and regulators. Which means price stability and enables the payment industry to reach a global scale. According to Reid, this growth will be made possible by forming partnerships with key stakeholders. Such as mobile apps and card providers.
At the same time, Reid pointed out that new challenges would emerge with the embrace of the norm. Reid named reliance on energy, cyberattacks, and a virtual war among the major threats to the so-called digital currency-based financial system. As this happens, the boundaries may become blurred between cryptocurrencies, financial institutions, and the public and private sectors, Reid wrote.
Countries analyze CBDC
Meanwhile, the need to create national digital currencies has been actively discussed by world governments. Bank of Japan Governor Haruhiko Kuroda said earlier today that there is no public demand in the country for a CBDC. Kuroda acknowledged the growing demand for cash payments. And added that the bank was carrying out technical and legal investigations into the matter.
The British Virgin Islands have taken a more proactive approach to CBDCs. Revealing that in partnership with blockchain start-up LifeLabs, the nation is creating a digital currency called BVI~LIFE. The currency is part of a wider effort to develop the local fintech industry. It is going to be tied to the U.S. dollar. France’s central bank is expected to launch a financial institution CBDC in 2020.
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