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Electronic and crypto payments can affect the global economy

Nikolay Belyavskij
January 30, 2020 12:00 AM
2 018 Views
Electronic and crypto payments can affect the global economy

The report “Part III. Digital Currencies: the Ultimate Hard Power Tool ”experts note that research in India and China in the field of peer-to-peer payments can trigger an economic shift, undermining the primacy of the US dollar in international financial transactions:

“As China (and India) develop electronic, crypto, and peer-to-peer strategies, the epicentre of global economic power could shift. China is working on a digital currency backed by its central bank that could be used as a soft- or hard-power tool. In fact, if companies doing business in China are forced to adopt a digital yuan, it will certainly erode the dollar’s primacy in the global financial market.”

Bank experts say that cryptocurrency has a number of undeniable advantages in the eyes of investors. For example, this is the availability and simplicity of investments, the absence of a link to financial assets, and a high level of profitability.

“Cryptocurrencies have been around for about a decade, but it was not until 2017, when bitcoin’s price surged to nearly $20,000, that they grabbed significant global attention. If we connect the dots between the dematerialisation of payments and the rise of cryptocurrencies, we can envision a near future in which cryptocurrencies gain broad acceptance. This view is supported by trends among young generations who readily accept digital currencies and payments.”

According to a Deutsche Bank survey, the current generation (Millennials) is loyal to digital payments and cryptocurrencies, and sees the future behind it. But experts call regulators, as well as the older generation, which is skeptical about digital assets, the main obstacles to a global change in the financial system. Regulators see the problem in the absence of control over such payments, in the convenience of their use for concealment from taxes and the implementation of criminal plans.

But, it is worth recognizing that the further development of cryptocurrency and digital types of payments is inevitable. Banks in many countries are already working on creating their own digital currency to remain competitive in the future.

“If the Chinese government, along with Google, Amazon, Facebook, or Apple (the so-called GAFA group), or a Chinese company like Tencent can overcome some of the barriers to cryptocurrencies, then cryptocurrencies could become more appealing. This will hasten their adoption and give them the potential to replace cash.”