The End Of Cash And Age Of Crypto Coming By 2030?

As the last decade was rounded out a month ago, it was interesting to see how far finance and technology had come. We did not have Stripe, Square, even 4G and the Ipad were still just an idea. But, interestingly, we did have Bitcoin at the turn of the last decade. 
Finance and payments are an ever-changing space. We have seen golden gallons and pieces of silver replaced by paper notes and then plastic cards. The age of digital has certainly helped speed along the way we use and understand money. We also now sit on the precipice of another financial revolution tied to the fourth industrial revolution. 
Blockchain, AI, IoT, and a bevvy of other technologies are starting to permeate their way into our lives, and the older, traditional models and technologies are looking to try and keep up, or falling away. With this boom in technology is the emergence of cryptocurrencies. 

Cryptocurrencies, despite being older than the Ipad, have only really permeated the mainstream space in the last three or four years, but their impact is quickly being felt. The growth in interest in digital currencies has expanded into many banks - such as JP Morgan and Wells Fargo who are building their own cryptos; into major enterprises, and even governmental agencies. 
The question that is cropping up more and more though, is when will cryptocurrencies take centre stage and usurp cash which is already being seen as obsolete in places like Sweden. One bank that has a strong interest in staying relevant after massive job cuts, is Deutsche Bank.

The bank, in its look towards 2030, has predicted that in the coming 10 years, the current fiat financial system could grind to a halt leaving the stage open to something new, something like cryptocurrency.  

The end of cash?

The Deutsche Bank report on the future of finance in the coming decade spends significant time looking at the prospect of cryptocurrencies. They note that this industry has long been seen as an addition, rather than a substitution to the global inventory of money, but this can change based on the future of cash - and cards. 
Cryptocurrencies have always been additions, rather than substitutes, to the global inventory of money,” the report reads. “They have not managed to take off as a means of payment despite their well-known benefits, such as security, speed, minimal transaction fees, ease of storage and relevance in the digital era.”
So, while cash sits in a precarious place for the coming 10 years, and this is to the benefit of cryptocurrencies, there are still some key issues that need to be overcome if cryptocurrency is to replace the current cash status quo.
“Cryptocurrencies need to overcome three main hurdles to become widespread. First, they must become legitimate in the eyes of governments and regulators. That means bringing stability to the price and bringing advantages to both merchants and consumers. They must also allow for global reach in the payment market. To do this, alliances must be forged with key stakeholders – mobile apps such as Apple Pay, Google Pay, card providers such as Visa and Mastercard, and retailers, such as Amazon and Walmart.”
Of course, some of this is already in the works with Walmart, as one example, already getting interested in blockchain technology. This is for its supply chains, and not related directly to something like Bitcoin, but it is a stepping stone for the next 10 years. 
However, it is not as simple as getting past those three hurdles, according to the bank, there would also be new challenges that would arise with the future popularization of cryptocurrency and the fall of cash. 
“If these challenges can be overcome, the eventual future of cash is at risk. But new challenges would arise. For starters, it will mean basing a robust financial system entirely on electricity consumption. To envision a smooth transmission towards a fully digitalised platform, the financial system needs to be ready to overcome any kind of electricity shutdown or cyberattack. Governments may increasingly need to safely store backup of citizens data in an alternative country. Estonia, for example, chose Luxembourg to store a comprehensive backup of government data, including details of its citizens’ health, population, business registries, as well as a data embassy.”

Growth of CBDCs

The future of cryptocurrencies may well not even rest with what we know now, in 2020. There has been an explosion in interest over the potential of central banks issuing their own cryptocurrencies - called Central Bank Digital Currencies (CBDCs).
Many, especially governmentally, feel that these tick the boxes of being both regulated and controlled, but can still over the benefits of a new digital age. In fact, at the recently concluded World Economic Forum in Davos, a new policy toolkit was unveiled for the growth of these CBDCs.
Central Banks on the magnitude of England understand that if governance can be acquired and standardized, the doors can really open on these digital currencies. 
“Governance is the core pillar of any form of digital currency,” said Mark Carney, Governor of the Bank of England. “It is critical that any framework on digital currencies ensures security, efficiency and legitimacy of payments while ensuring fair and open competition. We welcome the World Economic Forum’s platform to help develop a robust governance framework for inclusion through digital currencies.”



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