Deutsche Bank: Digital currency will become mainstream in the next 2 years and can replace cash
Deutsche Bank believes that digital currency as a means of payment could become a trend in the next two years. That is especially true if Facebook leverages its 2.5 billion user base to launch Libra stablecoin and Chinese announcement about a digital yuan.
A recent report by Deutsche Bank discussed the adoption hurdle and the implications of digital currency initiatives. The bank has studied the role of cryptocurrencies, stablecoins and central bank digital currencies as a means to replace traditional cash payment methods.
The Deutsche Bank report said a new digital currency could become a trend within the next two years and will eventually replace cash.
Cryptocurrencies were working in tandem with the internet in the early years, the report said. If this continues, there could be more than 200 million blockchain wallets by 2030, up from 50 million in 2020.
Facebook announced the Libra cryptocurrency and payment system in June 2019. The initial launch is expected in 2020, but researchers believe it may not be ready until the end of the year. On the other hand, China is making progress in the central bank’s digital currency efforts. Deutsche Bank is expected to pilot the project later this year. If this becomes a reality, China will become the first major economy to use digital currencies. That will pressure other countries to set up their own digital currency.
The survey included 3,600 Deutsche Bank customers in China, France, Germany, Italy, England and the US and found that millennials envision a purely digital currency. Although the use of cryptocurrencies has been limited so far, if large corporations and central governments break through the barriers to adoption, it could lead to widespread use.
Although a larger part of the older generation has never held cryptocurrencies or understood how they work, the report has found that “large majority” of millennials – those born between 1981 and 1996 – have traded. Cryptocurrencies and believe they will benefit the economy in general.
Chinese citizens take the lead in dealing with cryptocurrencies. Nearly 30% of young Chinese respondents said they traded with cryptocurrencies, compared to about 8% of respondents from the UK. In an earlier report, DB found that Germany is the country with the most cash-oriente, but it is better than the UK in buying and selling cryptocurrencies.
Deutsche Bank said in 2017 the opportunities provided to businesses by blockchain technology were “huge”, predicting that 10% of global GDP could be monitored or adjusted using blockchain by 2027.
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