More often than not we are all too happy to treat any technological advancement as something that is sure to bring about some inevitable changes to our everyday lives – and cryptocurrency is no exception.
First introduced in 2008, it took its time to become what it is now occupying the minds of the experts and ordinary people alike. It is, without a doubt, a peculiar phenomenon – a currency that has no physical manifestation, existing in cyberspace and allowing you to make transactions with complete anonymity. Crypto enthusiasts are all too eager to treat it as the money of the future, that will soon replace the ones that we are so used to. But is this a plausible future? The short answer is no, but let us tell you exactly why.
Much Ado Without Nothing?
As is the case with every new, cutting-edge technology that is introduced to the world, in order to become a currency of the future crypto needs to earn the trust and interest in various segments of the world’s economy.
One might argue that a variety of different actors of the financial sector do end up adopting cryptocurrency, at least as an additional feature, if not basing their entire operations on it. In fact, offering cryptocurrency deposit options is almost a must if the company wishes to promote itself successfully and withstand the competition on the market. A good example of that would be the fact that, according to some recent findings, when searching for a Forex broker, a significant amount of people claim that they look for a crypto deposit option.
This notion makes perfect sense, as in many countries Forex trading is banned altogether, thus, making the use of crypto the only way for the traders to access the FX market and brokerages.
But marketing apart is the wide adoption of cryptocurrency feasible for the companies in the financial sector? Well, truth is, it really is not – and one can easily see why. Like other currencies, crypto is not static, however, it is even more volatile than the traditional ones. On top of that, the commissions and the additional fees associated with it are pretty high. So what does it mean, in the long run?
What it means is that it is extremely unprofitable for the companies to use and accept it. Imagine that you have received payment for your services in crypto, and decided not to exchange it, either because the commission is too high, or you simply did not feel like it. The next day, your newly received profit could easily decrease by twice its original size – and such an unfortunate scenario could easily be your weekly occurrence. On top of that, despite significant growth in popularity, cryptocurrency is yet to be properly regulated, which basically means an additional layer of risk that no company would want to take.
Finally, the wide adoption of cryptocurrency is an implausible scenario as the ongoing craze could easily turn out to be nothing more than a bubble that is soon to explode. With the increasing variety of cryptos available, and no way of assessing the volumes of trade associated with them, it is very possible that the value of most cryptos is very exaggerated, and its appeal will be lost the instant this information becomes known to the public. So, no hope for the cryptocurrency to emerge?
Chances Are Slim, But There Are A Handful
As we have already mentioned above, the group of those who wholeheartedly believe in crypto eventually becoming the new flat currency cannot be overlooked. Moreover, it would be an exaggeration to claim every single one of those people is way too involved in wishful thinking. There is definitely a chance of crypto emerging, and below you will find the scenarios of how might be possible.
The global trend of governments imposing tight regulatory measures upon the financial sector is actually beneficial for the growth of crypto. The anonymity that it provides might end up to be the escape route for the members of the financial sector that want to get rid of the strong grip of the policymakers. On the other hand, should the governments decide to recognize the potential of the cryptocurrency and come up with a relevant and efficient way to regulate it, the financial sector will be more likely to adopt it in one step closer to making it the new flat.
We are yet to see what becomes of the cryptocurrency in the future. It could easily remain as it is right now – a unique phenomenon, that the world is yet to learn how to approach. On the other hand, it could vanish just as fast as it emerged, and give way to other technological advancements in the financial sector. However, just this year the Deutsche Bank has released a report entitled “Imagine 2030” where crypto is discussed as the new flat – so it might just be here to stay for much longer.