Can cryptocurrencies possibly change the global economic order?
No matter but you think about digital coins like bitcoin, every cryptocurrency in the world can disrupt the daily life of every person living on this planet. We can compare the cryptocurrencies just like the evolution of mobile phones worldwide. Due to the introduction of mobile phones and the internet in the hands of every person on this globe, many things have changed, and some of them are negatives as well. You might be well aware that initially, the purpose of making mobile phones was to compensate for the existing physical gap between two people sitting in different corners of the world. It was made to lower down the gap in communication and better the lives of humans.
However, now the results of the same are different. Nowadays, mobile phones and the internet have Made people use mobile phones. Therefore, using the internet and banking system is a lot easier than ever before. Just like that, the underlying technology of cryptocurrencies can be positive and harmful for the whole financial system. The whole world’s financial system can never go back to the same place where it was just a few years back. After the inception of bitcoins in 2010, things have completely changed for the whole financial system, and therefore, it is necessary to be understood.
According to the critics, cryptocurrencies can impact the entire global economy to a large extent. Indeed, the highly developed economies will get a significant impact from the developing digital tokens because they have a larger share of these digital coins. Moreover, it completely removes intermediaries like banking systems to facilitate the transaction. Primarily, the newness of cryptocurrencies and the lack of trust among the more extensive user is one of the most important reasons these are seen to be a threat to the financial system. Furthermore, due to the extreme volatility that cryptocurrencies like bitcoin have on Crypto Investor, their regularity can be hindered in democratic countries.
However, some enthusiasts say that the lack of regulations makes the cryptocurrency highly democratic, which is the ultimate idea of launching digital coins. They say that the financial including towards the developing countries will be highly supported by cryptocurrencies like bitcoin. Owing to the larger share of decentralized ledger systems for the storage of transactions in bitcoin, they can make a lot of differences between the traditional and modern financial systems. Also, the transaction cost is reduced with the use of bitcoins in making a transaction which is undoubtedly a better method of reducing the burden on poor people. However, the prices of bitcoins and other cryptocurrencies are ever-increasing, making it difficult for poor people to use them.
Even though there has been a lot of criticism about bitcoin and other cryptocurrencies, El Salvador very actively involved bitcoin in the legal system. In September 2021, bitcoin was adopted as a legal tender by El Salvador, North America. It is the largest cryptocurrency worldwide in terms of market capitalization and prices. It is being used as a hedge against inflation in El Salvador against the United States dollar. They have already been experiencing many benefits of using bitcoin as a legal tender, but still, some developed countries are against the decision of this developing country. Looking at the widespread popularity of cryptocurrencies, some nations are also looking forward to launching their own central bank digital currency.
The corporate organizations that provide a wider variety of services also attract cryptocurrencies. This is because the regulatory actions and oversight on these things are reduced if used in business firms. In addition, most people who use cryptocurrencies find it very easy to transact and trade in them.
However, the real issue can arise with transactions when you use just cryptocurrencies like bitcoin. It depends on the speed of cryptocurrencies if you can adopt a new technology or an old one. How smoothly you can make a transaction using cryptocurrencies will benefit the whole global system. But, there are chances that when transactions are speedy, and easily the whole global economy can crash. We can’t be sure about this, and hence, the future is yet to be seen.
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