A futurist has predicted that national currencies might be replaced by virtual currencies by the year 2030. According to author and futurist Thomas Frey, digital coins are not going to disappear and will likely displace about a quarter of national currencies in the next 12 years. Per Frey the factors that make them suitable candidates for replacing national currencies include their efficiency.
Frey also added that cryptocurrencies were likely to disrupt the banking sector and this would have wide ramifications across the globe. The futurist pointed out that this was also a view that was held by the current managing director of the International Monetary Fund, Christine Lagarde. The IMF managing director is on record as having said that international banking and central banks could be replaced by virtual currencies.
Part of the reason why financial institutions could be relegated to the sidelines by virtual currencies is the fact that digital currencies are decentralized and as such lack oversight and intermediaries. And by virtuae of the fact that they operate on a peer-to-peer level fees that financial advisers and banks get could decline or disappear altogether.
Also holding the same view in an interview with Time was fellow futurist James Canton. According to Canton while there are those who would lose money in virtual currencies, there was also a potential of earning vast riches.
Canton pointed out that the price movements of virtual currencies will be cyclical just like is the case with traditional investments such as bonds and stocks with the only difference being that digital currencies experience extremely high volatility. The futurist also predicted that the supply chain of virtual currencies will shape commerce in future. This is because the technology will reduce friction while increasing the exponential value between sellers and buyers of all products.
The futurist also added that even though digital assets have made it possible for citizens to evade their civic duty such as paying taxes due to the anonymity of the blockchain technology, governments are bound to step in.
?The government is going to tend to play their role. I think the FCC could provide prudent regulation to accept and encourage innovation with cryptocurrencies. There?s a role for governments to participate, but I do think too much regulation will be intrusive,? said Canton.
Despite the optimism expressed by the two futurists over the future of virtual currencies, in some quarters virtual currencies are still being viewed suspiciously. The governor of the Bank of England, Mark Carney was recently quoted as saying that digital coins bear the characteristics of a bubble and that investors will encounter a brutal reckoning.
With regards to serving a similar function as money Carney pointed out that virtual currencies were failing in this aspect since they were not acting as a unit of account, medium of exchange or store of value. In the recent past a note from the S&P Global Ratings has argued that cryptos are speculative instruments.
In order to prevent virtual currencies from being used in money laundering and terrorist financing Carney has called for greater regulations.
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