Will Cryptocurrency Ever Become A Mainstream Currency?

Introduction

There has been plenty of talk surrounding cryptocurrency recently. The buzz of this ever-evolving industry has not been like so since its inception in 2008. The pioneer cryptocurrency, Bitcoin, is the leading token and face of the industry. It has developed in several ways to assure that indeed cryptocurrency will become a mainstream currency sooner than expected. Everyone knows of the crypto miner who traded 10,000 bitcoins for two pizzas in May 2010. In the current market, these bitcoins are worth nearly USD 400 million. The unpredictability of value makes it a highly volatile investment. It still has gained its way into the mainstream.

Bitstamp’s Survey On Crypto As A Mainstream Currency

A crypto exchange service surveyed the possibility of cryptocurrency becoming a mainstream currency. In its findings, crypto will adopt into the mainstream within ten years. Bitstamp exchange conducted the survey. It involved over 28, 000 investors from 23 countries. These countries were widespread from Europe, North America, the Middle East, Latin America, and Asia-Specific. From this, 88% of the institutional investors and 75% of the retail investors foresee crypto having mainstream adoption within ten years. Furthermore, 80% of the institutional investors believe it will surpass the custom investment vehicles. The level of trust in crypto is high. 71% of investment professionals and 65% of daily investors have their trust in digital assets. Developing countries portray most of this trust. 79% of emerging economies believe crypto is more trustworthy compared to the 62% of more developed financial markets.

Signs of acceptance of crypto into a mainstream currency

PayPal has embraced crypto into its platform. Users can transfer digital currencies amongst each other, and recently, the platform enabled users to withdraw. PayPal has an expansive market reach to ease the trading of crypto. Household names in the investment space are also getting into the crypto space. 

There is growth in the crypto ecosystem via the Ethereum network. Smart contracts enable Dapps for P2P crypto exchanges and lending. The Ethereum 2.0 will enable access to financial services without fiat currency.

Importance Of Regulation In Making Crypto A Mainstream Currency

Cryptocurrencies have grown popular due to their decentralized nature. The currency is not issued by a Central Bank or regulated by the government. They have the free will to develop without regulatory supervision. It has been the key to its innovation and anonymous users that increased its usage. However, there is legitimate concern over the decentralized nature of crypto if it were to become mainstream. The elements of decentralization have exposed the crypto industry to scams, speculation, and market manipulation. Investors may not have as much protection over their assets. As portrayed by the Bitstamp survey, the key barrier to crypto investing is confidence and trust in its regulation. Regulations are critical for the cryptocurrency’s long-term success. It ascertains investor confidence, market stability, and a safe ecosystem.

Several governments are proposing regulation measures for the industry. The EU parliament voted for new traceability rules for crypto providers. They are to collect information on the users of their platforms and exchanges who hold crypto. It was met with concerns by crypto users regarding the privacy that is associated with crypto. It shows that what the regulations should entail is still up for debate.

Uncertainty over the content of regulation is causing a lack of international cooperation. Each country is likely to provide its own regulations. Central banks of countries are also considering their own digital currency(CBDCs). It should assist in monetary policy changes and improve global financial health. The adoption of CBDCs ensures a decreased cost of transfer of fiat currencies between banks, consumers, and companies. An international monetary policy on these digital currencies will have more progress for global commerce.

Banks must develop financial instruments around crypto. JP Morgan is developing a structure around this by investing in the blockchain. It is developing digital coins and having investments in the metaverse.

Conclusion

Crypto is a viable medium of exchange that is penetrating the mainstream. Increased adoption is critical in reducing its volatility. There will inevitably be increased adoption. Those that position themselves will benefit from crypto as a mainstream currency.

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