4 Ways by which Bitcoin, Blockchain Can Transform the Financial System

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A day will come when you will get your paychecks in the form of Bitcoin. You need to convert your cryptocurrency to dollars to buy groceries at Walmart or to buy coffee at Starbucks or books on Amazon. The rise in the value of the Bitcoin and digital currency rivals are not matched with everyday activity but the transaction time during Payment process is slow and of high fees.

Bitcoin with other digital rivals are not ready for the prime time as they can’t match the utility of today’s financial system. The coming generation may not go to the bank, and this will happen due to secure, peer-to-peer cryptocurrency transactions. The Blockchain technology and the new crypto wealth have given way for the four cryptocurrency futures that could change the financial order.

Also Read: Major Things to know about your Cryptocurrency at Tax Time

The Future Scenarios

There is a possibility that the Federal Reserve will be issuing its digital currency. The companies like Amazon, Walmart, and Starbucks, could issue digital coins which will inspire trust and gain its acceptance. The retails can accept payments in the currency in the form of Bitcoin, Ethereum or other cryptocurrency forms. If this all happens, then there is going to be deficits.

According to the International Monetary Fund director, Christine Lagarde said that “Virtual currencies might give existing currencies and monetary policy a run for their money.” He also said that the citizens might choose cryptocurrency as there is no settlement risks, no clearing delays, no central registration, no intermediary to check accounts and identities.

Also Read: The Largest Donation of Cryptocurrency by Ripple to Support Public Schools

The revolution which can come due to BlockChain is now the matter of study by some central banks and thinking of issuing their digitial currency. Yale University scholars have proposed FedCoin, and the future of FedCoin is to make a monetary policy flexible and forceful which allow the negative interest rates. According to a bank of England, it said that a central-bank cryptocurrency could boost GDP by 3%. Presently, FedCoin is far as it can do a massive disruption if it comes to the market.

The Revolution of Cryptocurrency or Bitcoin Crash

The future of cryptocurrency is wholly depended on government, and this means it will be smooth with regulation and cultivating it with a nominal regulatory touch. On February 6, 2018, Bitcoin hit low with $6000. Bitcoin again bounces back to $11,000, but after it, it falls to below $7,500.

When Bitcoin started its trading with Cboe Global Markets and CME, it hit the peak and gets doubled to $19,000 in the first half of December.

The rise in Systemic Risks

Warner criticized the CFTC for accepting the Bitcoin options. He said that the total cryptocurrency market could hit $20 trillion with 2017 like surge expectation. The JPMorgan Chase, a bank of America and Citigroup has already banned credit-card purchase of cryptocurrency and SEC, and other foreign governments have cracked down on early coin offerings. The social media giants like Alphabet (GOOGL) -unit Google, Facebook and Twitter have banned ads of cryptocurrency.

Also Read: Twitter is all Set to Ban the Advertisements on Cryptocurrencies

The Bank for International Settlements said that the cryptocurrencies could affect the financial stability in near future.

Amazon or Central bank, Cryptocurrency Kingmaker

The investors of Cryptocurrency think that the Amazon might accept Bitcoin or other digital rivals. It could be used as a trusted store of value and useful exchange medium. Amazon registered the domains in the name of AmazonEthereum.com, AmazonCryptocurrency.com, and AmazonCryptocurrencies. If companies like Amazon, Walmart start issued their cryptocurrency then it will save their transaction costs. Amazon also has partnered with JPMorgan in a healthcare venture and to create a new type of bank account.

The Cryptocurrency Future

The Fed controls the creation of money but Central banks seem to be losing their grip and any loss in the dollar or Fed bodies will help the rise of cryptocurrency future. In 2018 the Bitcoin’s end-to-end electronic payment system has come to market through a decentralized public blockchain. It helped the economist Friedrich Hayek’s idea to denationalize the money by fulfilling it.  The Fed now faces a challenge with the deficit of $1 trillion in the fiscal year 2019 and $2 trillion by 2027.

Also Read: Effect of Cryptocurrency on the Countries’ Economy

The fed is going through the same problems as the Bank of Japan. The Bank of Japan is forced to keep sky-high deficits with the help of easy money and asset purchases. According to Goldman Sachs economists, he said that “The continued growth of public debt raises eventual sustainability questions if left unchecked.” Deutsche Bank global credit strategist Jim Reid said that it is the start of the end of Fiat Money as the high debt levels will put fiat currencies at risk.

Also Read: South Korea Is Moving Ahead To Use Payments System Based On Cryptocurrency

The system for Fiat currency may be tested in the coming decade, and the alternative can find out. The Fiat Money is still young innovation for now, and it is in norm since President Nixon ended the dollar’s quasi-gold standard during the year 1971.

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