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Deutsche Bank “Crypto to replace fiat currencies by 2030” 

Deutsche Bank “Crypto to replace fiat currencies by 2030” 

According to research performed by Deutsche Bank, demand for alternative currencies will rise. The report expects that by 2030, this eventually will result in the replacement of cash by digital currencies.

In the report, strategist Jim Reid raises awareness of the challenges the existing fiat system encountered in the past few years, specifically with the emergence of cryptocurrencies. Reid emphasized that people‘s increasing demand for dematerialized means of payment and anonymity could drive more and more people to digital currencies.

Mainstream adoption and its challenges

In order to achieve mass adoption, digital assets need to overcome three significant obstacles. Including the perceived legitimacy in the eyes of legislators and regulators, which include price stability, allowing for global reach in the payment market. Reid says in the report that the establishment of partnerships with key stakeholders like mobile apps and debit card providers will stimulate this development.

Coinciding, Reid pointed out that with mainstream adoption, new challenges will arise. Among significant risks to the purported digital currency-based financial system, Reid dubbed dependence on electricity, cyberattacks and a digital war. 

Countries investigating Central Bank Digital Currencies (CBDC)

Meanwhile, world governments have been actively discussing the need to develop national digital currencies. Recently, Haruhiko Kuroda of the Bank of Japan stated that there is no public demand for a CBDC in the country. Kuroda recognized the increasing need for cash payments and added that the bank had been conducting technical and legal research into the matter.

The British Virgin Islands has taken a more proactive approach, the country is developing a digital currency dubbed BVI~LIFE. The coin is part of a broader initiative to grow the local fintech sector. It will be pegged to the U.S. dollar. Furthermore, the central bank of France is planning to pilot a CBDC for financial institutions in 2020.