If you are cryptocurrency literate, then you already know Facebook has launched its own digital money – Libra. Thinking about it, would the world’s largest social network with over 2 billion users launch a cryptocurrency out of the blues? That’s a definite no. Cryptocurrencies have an exponential prospect.
Does that prospect border on the possibility of cryptocurrencies taking over banknotes in the future? That is a question that lacks no debate.
Although most people still view cryptocurrencies as assets, it is fast becoming a medium of exchange. With some central banks on the verge of releasing their national cryptocurrencies, this form of currency is expected to grow rapidly.
Countries like Venezuela and Iran have taken the lead in this direction. Sweden, Russia, Japan, Israel, Senegal, Tunisia, and Estonia are at advanced stages of launching their own national crypto.
Clearly, one does not need clairvoyance to predict that national cryptocurrencies will dominate the future. It is predicted that by 2024, almost 94% of different types of Bitcoin will be released. This forecast reveals the alarming growth of blockchain technology.
Can Cryptocurrencies Replace Banknotes?
In the immediate future, this is unlikely, owing to the fact that digital currencies lack certain characteristics that can make it a legal tender.
Not only are they unstable, but they are also not considered legal in some countries. Again, one would need a large network of businesses to adopt cryptocurrencies as a means of exchange.
Despite attempted regulations to stabilise the crypto market, it still remains prone to instability and extreme fluctuation. A stable pricing value is thus hard to maintain.
Once we have e-coins that are more stable and easier to predict, we can say cryptocurrencies have scaled beyond being mere digital assets.
However, as national cryptocurrencies gain momentum across the globe, it is becoming even more feasible for e-coins to gain stability. Central banks have the mandate to ensure financial stability by the effective use of their monetary policy.
Currently, we are at the ‘what if’ stage as far as the dialogue surrounding the future of cryptocurrency is concerned. But looking at the future, we may one day pay for things on ALAT by Wema such as airtime recharge, bet wallet funding or data subscription with cryptos.