Cryptocurrencies pave the way of future financing: Deutsche Bank
Cryptocurrencies pave the way of future financing: Deutsche Bank
- cryptocurrencies are the future of the digital financial system, since authorities enforce their regulatory framework and develop more environmentally friendly mining solutions.
- currently the volatility of digital assets, high transaction fees and long transaction validation times keep you from being a common means of payment.
dealers and investors are increasingly aware of the potential of cryptocurrencies, especially with their growing market capitalization of several trillions. Marion Laboure, analyst and senior economist at Deutsche Bank, has recently published a research -based interview about digital currencies and her potential for the design of the future of global payment transactions.
Bitcoin and Ethereum are already being used as a means of payment in shops. However, due to long transaction times, high transaction fees and high volatility, they are not so common, said Labore. Bitcoin, for example, takes 10 minutes to validate a transaction and 20 USD as transaction fees.
In addition, people are not obliged to accept digital currencies as a means of payment because they are not supported by the government.
cryptocurrencies and the future of financial system
Nevertheless, the economist from the that bitcoin has the potential, that has, that to become the digital gold of the 21st century. The high value and the limited existence of the crypto asset make it a popular protection against inflation, a perception that JPMorgan shares.
that means that it will be mercury in the future for three reasons. About 66 percent of bitcoins are used for speculation and investments. In addition, the offer and demand relief of BTC is not influenced by occasional major purchases and market closings, since BTC has a limited “tradability”. The BTC price is also strongly influenced by the mood and the approach of investors and crypto enthusiasts.
On the other hand, the economist Ethereum holds due to its great use in defi and NFT platforms for digital silver. According to reports, however, cryptocurrencies such as Polkadot, Solana, Binance and Cardano Ethereum could bring about their money.
However, the lack of regulation is a major disadvantage of all digital currencies, emphasizes Laboure. This discourages many investors, although the entry into crypto appears profitable. In this context, analysts from Deutsche Bank expect that many countries have created a strong regulatory framework for cryptocurrencies by 2022
In addition, Laboure says that the massive CO2 footprint of crypto mining caused serious environmental concerns. However, the latest technological developments that aim at environmentally friendly mining are promising.
After all, Laboure is confident that cryptocurrencies, digital central bank currencies (CBDCs) and cash will exist side by side without one replacing the other. Governments have been pushing digital payments for three years. Lately, countries such as Qatar and El Salvador have been forged paths to use digital currencies for local and international transfers. The use of cash could decrease if the use of CBDCs and cryptocurrencies increases. The number of people who deal with cash has already declined due to the pandemic. India is to enforce a crypto regulation framework. The country also plans to start the pilot project of its CBDC, just like its neighbor Bhutan. on the downside
Source: Crypto-news-flash.com
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