It is evident central banks do not like cryptocurrencies all that much. In fact, they are looking to create their own centralized digital currencies moving forward. On paper, it makes a lot of sense to take this approach. However, missing out on cryptocurrency is not in the best interest of central banks either. When consumers take back the control over the money, banks will eventually become obsolete. Capitalizing on this trend is a smart idea, although doing so is not easy.
When running a central bank, the main objective is to make money. In most cases, this is done by making other institutions dependant on your services and forwarding some of their revenue. However, that situation will come to change in the years to come It may take five years or fifty, but cryptocurrencies are quickly turning central banks into laughing stocks as we speak. It is only a matter of time until everyone in the world realizes they need to control their own money at all times. Cryptocurrency gives them that option without requirements.
Cryptocurrencies Will Eventually Replace Central Banks
Moreover, we have seen central banks ignore cryptocurrencies for quite some time now. That ignorance will eventually come to bite them in the rear. Traditional investment vehicles such as bonds and stocks are already losing popularity Consumers are less eager to put vast amounts of money in their savings accounts as well. Negative interest rates are rather common in Europe and other regions. The US eludes this scenario for now, but they will feel the negative repercussions in due time. Never delay the inevitable unless absolutely needed.
We are in what is known as the “currency Renaissance’, so to speak. Central banks have a difficult decision to make. Either they are open-minded toward cryptocurrency or they keep fighting whatever the future may hold. Not adapting to these changes will have a negative effect, though There are some reasons why these institutions do not embrace cryptocurrency openly either. The banking sector is notoriously slow when it comes to making decisions. Moreover, most banks are run by “the old guard” who want nothing to do with technology and innovation.
It is evident exciting things are on the horizon in the financial sector. Cryptocurrencies are an integral part of fintech momentum on a global scale Consumers deserve to control their money at all times. There is no need for third parties acting as a custodian of funds. This method has been flawed from the day it was created and is still the worst possible outcome today. It is only a matter of time until central banks realize that as well. They will keep fighting the inevitable, but ultimately, it will be a wasted effort.
Header image courtesy of Shutterstock