Will fiat currencies last much longer? This is the question being posed by Germany’s Deutsche Bank.
Deutsche Bank Is at the Center of the Bitcoin Question
As we inch closer and closer towards a fully digital age, many of us are noticing that cryptocurrency seems to be rising through the ranks as a main form of money for many people. While it’s not widely accepted as a means of payment just yet, it is one of the largest speculation tools utilized today, which means it’s got a healthy percentage of investors rallying behind it.
Many banks are wondering if the crypto age will expand enough to mean that traditional fiat will no longer be feasible. In a report covering the next ten years of potential financial trends, Deutsche Bank strategist Jim Reid explains:
The forces that have held the current fiat system together now look fragile and they could unravel in the 2020s. If so, that will start to lead to a backlash against fiat money and demand for alternative currencies, such as gold or crypto could soar. The demand for alternative currencies will therefore likely be significantly higher by the time 2030 rolls around… Will fiat currencies survive the policy dilemma that authorities will experience as they try to balance higher yields with record levels of debt? That’s the multi-trillion-dollar (or bitcoin) question for the decade ahead.
The financial system, according to the report, has been severely weakened over the years thanks to what it refers to as inflation and “decades of low labor costs.” As a result, many countries from China to Russia to the United States have sought ways to establish their own, unique digital currencies, and many banks are constantly on edge – wondering if another global financial meltdown, like what occurred in 2008, will happen again.
Reid writes:
Assuming governments back cryptocurrencies and consumers want them, the adoption rates will drive the timeline for mainstream use. If current trends continue, there could be 200 million blockchain wallet users in 2030.
Big Change Is Heading For Us
Saxon Bank chief economist Steen Jakobsen believes that 2020 will mark a time of huge policy change, though this might not always be a good thing. He explains in a statement:
We see 2020 as a year where at nearly every turn, disruption of the status quo is an overriding theme. The year could represent one big pendulum swing to opposites in politics, monetary and fiscal policy and, not least, the environment. In policy making, it could mean that central banks step aside and maybe even slightly normalizes the rates, while governments step into the breach with infrastructure and climate policy-linked spending.
In other news, a Supreme Court order has halted Deutsche Bank from handing over the tax return information of current U.S. President Donald Trump.
