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
In the report, strategist Jim Reid raises awareness of the challenges the existing fiat
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
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.