The past decade ended last month, and it’s interesting to see how far finance and technology have developed. We don’t have a stripe, a square, or even a 4G or tablet. It’s just an idea. But interestingly, at the turn of the last decade, we did have bitcoin.

Development trend of cryptocurrency in the next 10 years

Finance and payment is a changing field. We see gold and silver replaced by paper money and bank cards. The digital age has undoubtedly accelerated the way we use and understand money. We are now facing another financial revolution related to the fourth industrial revolution.

Blockchain, artificial intelligence, Internet of things and other technologies are beginning to penetrate into our lives, and the old and traditional models and technologies are trying to keep up, or gradually disappear. With the prosperity of science and technology, cryptocurrency appeared.

Although the history of cryptocurrency is earlier than that of iPad, it has not really penetrated into the mainstream until the last three or four years, but people soon feel their influence. The growing interest in digital money has extended to many banks, such as JP Morgan and Wells Fargo, which are building their own cryptocurrency; Digital currency is entering large enterprises and even government agencies.

The growing question, however, is when cryptocurrency will become the central stage and replace cash, which is already seen as obsolete in places like Sweden. Deutsche Bank is one of the banks with a strong desire to remain relevant after massive layoffs.

Looking forward to 2030, the world bank predicts that in the next 10 years, the current statutory financial system may gradually stagnate, leaving room for the emergence of something new, such as cryptocurrency.

The end of cash?

Deutsche Bank’s report on the financial outlook for the next decade has spent a lot of time studying the outlook for cryptocurrencies. They point out that the industry has long been seen as a supplement to, rather than a substitute for, global currency stocks, but that may change with the future of cash and credit cards.

Cryptocurrency has always been a supplement, not a substitute, to the global currency stock, “the report wrote“ Despite their well-known advantages, such as security, speed, minimal transaction costs, ease of storage and relevance in the digital age, they have not been successful as a means of payment. “

Therefore, although cash is in an unstable position in the next 10 years, which is beneficial to cryptocurrency, there are still some important problems to be overcome if cryptocurrency is to replace the current cash situation.

Cryptocurrency needs to overcome three main obstacles to become popular. First, they have to be legitimate in the eyes of governments and regulators. This means bringing stability to prices and benefits to businessmen and consumers. They must also take into account the global impact of the payment market. To do this, alliances must be formed with key stakeholders, including mobile applications such as apple pay and Google pay, card providers such as visa and MasterCard, and retailers such as Amazon and Walmart. “

Of course, some of them are already working with Wal Mart. For example, they have begun to be interested in blockchain technology. It’s for its supply chain, not directly related to things like bitcoin, but it’s a stepping stone for the next 10 years.

However, the world bank said that this is not as simple as crossing these three obstacles. With the future popularization of cryptocurrency and the decline of cash, new challenges will emerge.

“If these challenges can be overcome, the ultimate future of cash will be at risk. But there will be new challenges. First, it will mean that a sound financial system is based entirely on electricity consumption. In order to achieve smooth transmission to the fully digital platform, the financial system needs to be prepared to deal with any form of power interruption or network attack. Governments may increasingly need to store backup citizen data securely in another country. For example, Estonia chose Luxembourg to store a comprehensive backup of government data, including details of citizens’ health, population, business registration and data embassies. “

The growth of CBDC

In 2020, the future of cryptocurrency may not even depend on what we know now. There has been a surge in interest in the potential of central banks to issue their own cryptocurrency, known as central bank digital currency (CBDC).

Many people, especially the government, believe that these measures meet the requirements of both regulation and control, but may still outweigh the benefits of the new digital age. In fact, at the recently concluded world economic forum in Davos, a new policy toolkit was launched to address the growth of these cbdcs.

The central bank knows from the strength of England that if it can achieve and standardize governance, it can really open the door to 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 essential that any digital currency framework ensure the security, efficiency and legitimacy of payments, as well as fair and open competition. We welcome the platform provided by the world economic forum to help develop a strong governance framework for inclusion through digital currency. “

Responsible editor; zl

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