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Will Cryptocurrencies Take Over the Conventional Money?

  • July 31, 2020

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Will Cryptocurrencies Take Over the Conventional Money

Want to learn more about the relationship between cryptocurrency and conventional money?

When Bitcoin whitepaper was published in 2009, the thought was clear – there was a requirement to make a decentralized currency framework that could provide freedom to a large number of people from the stranglehold of national banks and other monetary institutions. Thus, Bitcoin came into existence, becoming the money of the people and stirred a complete bitcoin revolution that many people have gained from. You can invest in bitcoin trading with market master.

After just about ten years, Bitcoin has gained enough prominence and has helped in creating 1,500 other blockchain-based coins. The digitization of cash is unavoidable, and unexpectedly, many governments are presently searching for options to launch their own cryptocurrencies. In the following sections, we take a look at these aspects, along with a few cases that point towards the same.

National Cryptocurrencies

The first decade of digital currency was mainly about taking it up and following the guidelines, while the coming decade can be about national cryptocurrencies promoted by governments. The basis of national digital currency, like the different cryptos, will be blockchain technology, yet they will be given and supported by national governments.

The main issue with any national currency is decentralization due to the fact that governments can be hesitant in losing control of their financial framework. However, on the one hand, national cryptocurrencies can fail one of the significant interests of the blockchain innovation, while on the other, they can help create a more robust financial environment.

Related to cryptocurrency and conventional money: Cryptocurrency Risks and the Advantages of Cryptocurrency Trading

Venezuela and Cryptocurrencies

Due to the extraordinary capabilities of the blockchain innovation, some national banks are very close to unraveling their national digital currencies, while numerous others have set tentative cutoff dates for their release.

Venezuela was among the first to make a move and came out in February 2018 with its Petro Crypto. The Petro digital money was initially launched to limit the effect of US sanctions on the nation and improve access to universal financing as also to supplement the Venezuelan currency, Bolivar.

The Petro was intended to be sponsored by the country’s rich stores of natural resources like gas, gold, oil, and diamonds.

The cryptocurrency got national support in May 2018 when the nation's President announced the establishment of a youth bank completely financed by the national digital money.

Iran and Cryptocurrencies

Another nation that has been motivated by Venezuela is Iran, and incidentally, it is also subject to US sanctions, and that can dislodge its asset-dependent economy. The Central Bank of Iran declared two months back that it was drawing up its plans to start its own cryptographic money supported by Iranian rials. The sanctions from the US will imply that Iran is cut from universal monetary frameworks. However, the digital currency that makes use of the blockchain innovation will enable the nation to help in fund accessing and transferring globally.

Many nations that are in the final phases of starting their own digital forms of money include Sweden, Israel, Senegal, Russia, Estonia, Japan, and Tunisia.

Where will cryptocurrencies stand

Looking at the trend, it is a fact that national digital currencies will be a prevalent pattern sooner rather than later. However, it can have its own advantages and disadvantages. As far as money dissemination, digital currency is secure and simpler to distribute than conventional money. National digital forms of money will likewise help in quicker repayment of installments and with even a lot less transactional expenses. Anyway, a blockchain-based cryptocurrency also has some disadvantages.

National digital money will need massive investment, and using taxpayer's money for the purpose may not be ethical. Another hindrance would be slow transactional authorization, an area that is constantly being developed upon in the crypto environment. But till the time a plausible solution is developed for it, issues will linger. The wasteful utilization of power for making mere payments is another factor that must be considered.

Conclusion

Eventually, national banks are responsible for monetary stability by effectively utilizing their fiscal arrangement. National digital currency can just make it simpler for national banks to accomplish this because financial strategy can straightforwardly be communicated to families as well as firms.

As the blockchain innovation keeps on improving, it just implies that national digital currencies will help in solving the current problems of the traditional financial system. Thus, looking at various countries and their available options, we can surely say that many of them may launch their own cryptocurrencies within a short span of time as that can provide them with ample room for financial stability and the greater public good.

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