Thinking adjustment. A recent poll consisting primarily of banking executives discovered that most feel that bitcoin and digital assets could replace fiat currencies like the U.S. dollar within the next 5 to 10 years. Hard to believe since most financial professionals were bitcoin skeptics only a few years ago. But hey, guess you can teach old banker types new tricks.
So, just to be clear, this recent poll was NOT done by some bitcoin miner in Uzbekistan but rather by the accountancy company Deloitte. One of the Big 4. Specifically, under the direction of Linda Pawczuk who heads up Deloitte’s global blockchain and digital assets practice. She found 76% of finance professionals think bitcoin and crypto could serve as an alternative to, or replacement, for fiat currencies in the next 5 to 10 years. Seems like just yesterday that same percentage thought bitcoin and cryptocurrencies were the work of the devil.
To be sure there is a distinction between digital assets and bitcoin. Digital assets can mean real estate backed by digital tokens, NFTs (Non Fungible Tokens), etc. which would certainly not be a threat to replace fiat currencies. Likewise an “Amazon Token” or a “Walmart Token” could be considered a digital asset used to buy goods in their stores but not used as a broad medium of exchange (for mortgage payments, as example). No threat to be a fiat replacement there.
Another “definition” of digital assets is cryptocurrencies. Many central banks, including the US, are considering issuing digital forms of their currencies. These CBDCs (Central Bank Digital Currency) are only meant to digitize their paper currency, certainly NOT replace the fiat. Indeed, China has already been testing its CBDC (digital yuan, or e-CNY) with the People’s Bank Of China in the lead. Others such as the US and EU are still “discussing” such a move. But just having a digital version of a fiat currency doesn’t signal a replacement for that currency.
But here comes the King Kong in the fiat room. Bitcoin. Sure there are other cryptos, but bitcoin is sort of the Harley Davidson of cryptocurrencies. Numero Uno for sure. AND, a real threat to any and all government fiat currencies. Bitcoin could be (and is) on its way to replacing ALL the world’s fiat currencies. Now you can only imagine how global central bankers feel about this (hint: not happy). However, in China’s case, they are beyond “not happy.” They also realize they have perhaps 5-10 years at best to do ‘something” about it.
China is on record of saying they want the yuan to be the world’s reserve currency. That’s their goal. Which, in essence, means replacing the dollar. They mean it. So, replacing fiat currencies with something like bitcoin is not in the “grand plan.”
Already China has (essentially) declared war on bitcoin…..to no avail. The Central American country of El Salvador is officially adopting bitcoin as legal tender on September 7th with other Latin countries (Panama, Argentina, Brazil) looking to follow their lead shortly. A global seismic shift under way?
Big movements always begin in unforeseen places. So, can one country’s fiat currency co-exist with a global cryptocurrency like bitcoin
Many financial executives predict we have 5-10 years to find out.