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Cryptocurrencies are constantly gaining popularity and mass adoption. While private companies and individuals are pioneering in this sense, the governments too want to have a say in this. And despite some of them being overly pessimistic about Bitcoin and other digital assets, Germany has some other thoughts.
According to recent research called “ Imagine 2030”, which is a publication from the Deutsche Bank, the world is already moving towards cryptocurrencies at a faster and more accelerated rate and considering the shortcomings of fiat currencies, the former will completely replace the latter by the year 2030.
A Deutsche Bank strategist Jim REID begins his publication by listing some of the most rampant drawbacks and cons of conventional currencies such as inflation, poor security measures, etc. As Reid stipulates, the world is already moving towards crypto adoption, including both individual and corporate entities as shown in the ETFinance broker review. And as time passes, the popularity of cryptocurrencies is only going to increase, boosting its demand and wider adoption.
However, wide adoption has its own challenges. According to Reid, there will be three major barricades that the cryptocurrencies have to overcome initially: they have to become more acceptable the legislators and governments around the world, as well as demonstrate more price stability, and become even more popular.
The problem of volatility
In terms of price volatility, the cryptocurrencies have had the wildest game for more than two years now. In 2017, Bitcoin’s price started to expand to previously unseen heights, eventually reaching $20,000 peak. However, in just 2-3 months’ period, the price got stable at around $7,000.
Now, this might have been a very lucrative opportunity for investors and whatnot, since we’re talking about around a 300% increase in no more than two months, but when it comes to using Bitcoin as a main form of payment, it was practically impossible. No one in the right mind would store their value on this digital asset hoping to maintain it for a long period of time.
And to be fair, the financial industry has come up with a better alternative. In 2014, a notion of stablecoins came into existence. The name is pretty self-explanatory: a crypto asset that has low or no volatility whatsoever. Instead of being this free-floating currency, stablecoins such as Tether are backed by either a currency, a basket of currencies, commodities, or anything more stable.
Facing new challenges
So, stablecoins might be one way of lifting those challenges from crypto adoption. But even the stablecoins are fighting their own battles since the EU has outright banned its usage, while the US is considering to assimilate them with securities.
And even when those challenges are overcome, yet another set of setbacks arises: cyber-attacks, power consumption, the war in digital realms, etc. And, as Reid suggests, this can lead to blurred distinctions between private and public entities, financial institutions, and cryptocurrencies themselves.
However, he is still convinced that the only way forward is through cryptocurrencies. People are constantly demanding new ways of simplifying and at the same time, making financial transactions more secure. And at this point in time, only the cryptocurrencies and blockchain are capable of doing that and for that, the year 2030 will mark a complete coverage of the world by cryptocurrencies.
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