In a huge setback for the Fiat money system, the upcoming period may belong to cryptocurrencies and Bitcoin. According to the latest research report by Deutsche Bank (DB) and its chief analyst Jim Reid, crypto and Bitcoin are likely to replace Fiat by 2030.
The 149-year-old bank has also revealed that Germany may also let its financial organizations start dealing in crypto from 2020. DB has also emerged as Germany’s largest bank.
Deutsche Bank’s research report titled “Imagine 2030” highlights 24 “contrarian ideas” that may take place in the next decade all across the world. It includes the implementation of six-hour working hours, “on-demand” life wherein your refrigerator will sense any shortfall of milk, and place an order independently for a fresh batch.
Many may find it unthinkable that the report mentioned about the extinction of Fiat currency by 2030.
As per Reid’s viewpoint, the reason behind this development is the surging demand of people for a dematerialized mode of payment and secrecy. Reid has also noted that spike in inflation and a sharp increase in prices of gold in the 1970s era have emerged as the major causes that led to the trend of cryptocurrencies.
As per Reid’s opinion, the rise in inflation has eroded the confidence of people in paper currency. And, in the last few years, global inflation was somehow checked by economic growth in China. China has emerged as the major suppressor of worldwide inflation especially in the last 40 years as a result of its significant increase in labor supply. The era is coming to an end. The finding of the study asserts that the present Fiat system is now being held by “fragile” forces.
The continuously surging inflation, negative interest rates on people, low confidence in state-sponsored money may push the demand for alternative currencies. The possibility of cryptocurrency replacing Fiat currency appears to be strong, Reid added.
Cryptocurrencies have also got a strong edge over the present monetary system in terms of security, speed, least transaction fees, convenient storage, and reliance in the digital era pointed to the Deutsche Bank’s analyst.