While the cryptocurrency industry can still expect to see its fair share of regulatory hurdles, censorship, and backlash, its progress up to this point has paved the way for developers to turn their attention to larger projects that are designed to succeed where Bitcoin failed.
One of the more notable projects to emerge is China’s expected national cryptocurrency, which will act as a digital alternative to the Yuan. With such a development in the works, the question is not only whether or not cryptocurrency can thrive in such a setting, but where it will take us if other entities should choose to follow suit.
Beyond Bitcoin: Government-Backed Cryptocurrencies
The conversation surrounding government-backed stablecoins has largely been dismissive up until now, with many governments not seeing the need to switch over to a digital version of fiat currency. But with innovation comes competition, and this competition sparks the desire for many to build and surpass what others are creating.
Take, for example, China’s national stablecoin. While others may not see a need for a national stablecoin, there is no doubt that countries will begin diving deeper into crypto in an attempt to keep up with the pace of external markets. If there is a demand for crypto, people will naturally seek to meet this need.
But what would such a global market look like? Would it be the same as it is now? Would we see decentralized crypto take over?
In the event that China’s stablecoin has an effect that inspires the actions described above, we may potentially see two different outcomes. The first would be a world in which all countries would have developed their own cryptocurrencies while relying on existing or new assets to facilitate transfers globally. It would be much like it is now, but with crypto banks using products like Ripple to eliminate high fees and send money instantly.
Another world is one in which all countries build their cryptocurrencies on a single blockchain to allow them to interact directly. In this world, stablecoins could easily be swapped for one another, allowing for seamless transfers without having to worry about a third party crypto to guard transfers against high fees and exchange processes.
It’s important to note crypto’s importance in underdeveloped countries as well. Where fiat has failed and corruption is rampant, decentralized products have managed to help build both wealth and economies. A future with cryptocurrency in place of fiat currency is not a hard one to imagine if mass adoption is achieved and we reach a place where the benefits far outweigh the potential disadvantages.
For Now… It’s a Waiting Game
The situations above are purely hypothetical, but it is hard to deny that the survival and applications of cryptocurrency and blockchain have been impressive since crypto began gaining public attention. Should the right series of events occur and governments embrace crypto rather than continually pushing it away, we could see a world where cryptocurrency assets dominate the market and fiat becomes a secondary store of wealth.
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