Deutsche Bank Predicts Cryptocurrency Could Replace Fiat by 2030
- 09.12.2019 05:38 am
Deutsche Bank has published its outlook for the decade ahead, predicting growth in appeal of cryptocurrency given the fragility of fiat money.
The 'Imagine 2030' report highlights the dangers of the forces holding the fiat money system unravelling in the next decade, in turn fuelling the demand for crypto.
Deutsche Bank describes cryptocurrencies as "additions rather than substitutions", but believes this may change by 2030.
Given the aging population, labour costs, which have been low for decades, could increase, bringing an end to generations of low inflation and signalling a return to the "rampaging late-1970s peak".
This will drive demand for alternative currencies, while fiat money will be tested by governments and central banks wrestling with higher inflation and the policy decisions that come with it.
Deutsche sees the potential in cryptocurrencies taking off a payment method given the advantages of speed, security, minimal cost and "relevance in the digital era".
The German bank therefore concludes that a new, mainstream cryptocurrency may emerge in the decade ahead.
With regulatory support, their appeal and adoption could increase and eventually replace cash, given the desire of governments and banks to move to a cashless society.
Cryptocurrency needs to acquire legitimacy in the eyes of governments and regulators, which would bring stability in the price and allow for global reach. This would fuel the interest of stakeholders in the payments industry, such as Visa and Mastercard, not to mention tech giants like Apple and Google.
In the short-term, however, political support remains far from clear. Buying and selling cryptocurrency in China and India is banned, with the former adopting a singularly hard stance of late.
Moving to any kind of digitised, global payments system will also bring to the fore concerns of cybercrime or anything else that curtails the use of electricity.