Digital currency concept
Digital currency is now a hot topic for finance. Bitcoin and other cryptocurrencies are classify under digital currency. Ever since bitcoin came in “full force” to make its presence known in 2017, various companies are diligently trying to reduce the flaws of various cryptocurrencies in the view to challenge bitcoin. Technological advancement will surely improve its capability despite common common issues like long transaction time, consuming high electrical power and the preferred source of money laundering by criminals.
It is only recently that Jerome Powell state that digital currency is a threat to then US dollar. This has thus trigger a lot of digital currency projects. A significant amount is invested into digital currency development.
China already begin to develop the digital yuan. It is worthwhile to note that facebook libra coin implementation has cause the Fed to seriously consider crypto. It is predict that digital currency like crypto is becoming mainstream technology in the near future.
The above shows how the different money system works. It is worthwhile to note that cryptocurrency does not need a central bank to operate, thus significantly can be cheaper to process and more transparent. No one can deny the true benefits of these type of digital currencies.
China has been quietly developing their own digital currency. To date, the People’s Bank of China has file more than 80 patents. It is their secret plan to launch a digital currency which is overlook by Beijing. It sparks alarm in the western world for their bold plan of issue and supply of central bank digital currency. Also the integration of digital wallets into existing retail bank accounts.
They want to algorithmically adjust the supply of a central bank digital currency base on certain trigger such as loan interest rate. In their other patents, there are also building digital currency chip cards/ digital currency wallets that banking consumers could potentially use.
Other ways include consumer deposits with their existing banks and then exchange that for digital currency while interbank settlement and clearing can potentially be sped up behind the scenes. China has fast becoming a force in financial innovation and global influence.
So China has make high investment and taking it very seriously.
Other countries developing digital currency
There are several other countries developing their own digital currencies. Countries like Ecuador, Senegal, Singapore and Tunisia. Not just them but soon countries like Estonia, Japan, Palestine, Sweden and Russia will want to develop their own cryptocurrencies. The world’s largest economies could force the hands of smaller nations and we would expect momentum to build in the years ahead.
A move to a centralized cryptocurrency will not be well received by the crypto community. However, a few will argue against the need for some regulatory oversight and it would perhaps be more appropriate to come from a regulatory body. This regulatory will need to be independent of governments and central banks.
A cashless world is just around the corner and cryptocurrencies are the perfect replacement. banks like HSBC, Barclays, UBS and Santander currently developing a Universal Settlement Coin in a bid to make trade more efficient. Considering a future with no dollar? Well, it definitely can happen in the future.