The more people join the trade in cryptocurrency, the more uncertain the future of cryptocurrency gets. While some experts wish it takes over the world as the means of buying and selling [ fiat], another school of thought believes that is not as possible as it looks.
The story of cryptocurrency which began as a niche market in 2009 with Bitcoin for few to mine and profit has become something, anyone, with a computer and the mining knowledge to mine. This shows how democratic the market truly is. No single person sits somewhere and controls the crypto market. But with everybody on board, altogether the market is run.
However there are still questions about what the future holds for cryptocurrency in the face of crucial details like regulation in the US, mass-market acceptance of cryptocurrency payments, and countries gradually accepting Bitcoin and other digital currencies as legal tender.
The hope is, as these crucial issues develop and are settled, the future of cryptocurrency will take shape but ‘how long will it take?’ is a question most people will love to know especially because it is unclear whether the digital currency will be accepted as fiat and hence stay with us forever or it will be featured into it. Investors would love to make the hay while the sun shines.
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In some parts of Africa and some parts of the world, ‘Bitcoin is an official currency’ while in Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh, and China, ‘Crypto transactions are illegal’. And then there are governments intentionally ignoring its significance. There is no single global take on the issue in the short term.
In the US, the crypto regulations law is progressing onto a federal level with Biden’s administration showing a more substantial interest in the digital world and making it safer for everyone. With knowledgeable people footing for the future regulation of crypto, there is hope that a workable system can be developed for investors, crypto businesses, and traditional banks.
But that does not guarantee the US accepting it as a legal tender anytime soon. However, the unstoppable widespread of digital currencies will spur politicians and regulatory agencies to take faster steps so the blockchain system benefits from widespread usage.
So in the near term, cryptocurrency is not yet ready to replace fiat, this is because the fiat currency prices and values are much more stable than cryptocurrency, crypto is still very new – just a little more than 12 years in the system. So it turns out to be as stable in value in the future.
As said by PayPal CEO Dan Schulman, ‘we are still in the early innings of crypto and digital currencies, but we clearly see it as a major part and redefinition of the financial system. The next 5 to 10 years are going to bring massive change’.
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According to Hume, a research analyst for MorningStar, the future of cryptocurrency will possibly play along with other players in the financial market. Though this could happen sooner than later.
‘We expect it to unfold over the long term, it’s our view that over time the cryptocurrencies will kind of converge with existing players rather than unseat them‘ she said.
In that line, she also cited cryptocurrency exchange Coinbase’s debit card partnership with visa, which converts users’ crypto into their home fiat currency in transactions though she noted it ‘kind of defeats the whole purpose of partnering with crypto – the decentralization idea.
That partnership though is ‘an example of a partnership between a crypto-native firm and an incumbent that we expect to see more of – if the digital asset community hopes to have some staying power’. she said. Nevertheless, the partnership reached $2.5 billion in transactions in the fiscal first quarter of 2022.
The question of what the future of cryptocurrency will be is highly determined by how investors respond to the waning and surging of digital currencies in the long run.
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