Cryptocurrencies Are The Future Of The Financial World But It Won't Be Like What You Expect
Since many years ago, a lot of cryptocurrency optimists have been predicting that everything will go digital, including currencies. That’s why they believe cryptocurrencies will eventually replace cash and papers.
When Ethereum became popular, people started to realize that the potential of the blockchain industry has become greater than just a simple peer-to-peer digital money. Many people started to use the Ethereum blockchain to create decentralized applications.
And the rise of decentralized applications actually made people think that the potential of blockchain is limitless. The idea of connecting blockchain with something in real life has become the new norm.
For example, nowadays, there are stable tokens with 1-to-1 valuation to the US dollar, such as TUSD or USDC. There are also gold-backed crypto tokens like DGX, where the value comes from the price of physical gold.
Crypto community has been craving for more mainstream adoptions outside trading speculations. And if we judge by the past few years from 2017 to late 2019, it looks like the interest from outside the veteran crypto traders has been increasing a lot.
Governments And Corporations Are Exploring Crypto Options
The future of cryptocurrencies looks more certain than ever, but it doesn’t look like the future will be like what the average crypto traders have been expecting. I will explain why. The Central Bank of China is planning to release its own CBDC (Central Bank Digital Currency).
Many other central banks from all over the world are also exploring the same idea. For example, European Central Bank is also discussing the concept of crypto-based digital Euro. Also, don’t forget about Libra, an ambitious project from Facebook and other top corporations.
Alongside these megaprojects from big corporations and central banks, we also have plenty of real estate properties that have been tokenized on the blockchain. One of the examples is the $30 million Manhattan real estate property that made it to the news back in 2018.
When the future of cashless society is shaping up like all the examples above, many things that were previously done outside the crypto world are now being transferred to the blockchain revolution. Previously, nobody expected the profitability of an investment group would be represented in the form of a crypto token.
Nowadays, investment groups like the Wolfs Group or investment platforms like BnkToTheFuture are trying to bring efficiency to the investment world by tokenizing assets and profitability of companies that the investors are interested in. Wolfs Group, for instance, is tokenizing its investments' profitability, and they themselves are investing in the fintech sector alongside the real estate market.
The Future Will Be Less Speculation, More Valuation
You might be wondering why all these good crypto-related news don’t look like the future of what people have been expecting? Here’s why. Because the future of crypto financial will be more normalized and more dependent on other factors outside pure trading speculation itself. Meanwhile, crypto traders are used with price volatility on their investments with standard utility tokens such as on BTC, ETH, or LTC.
It does not mean that there’s no future for speculation or for classic cryptocurrencies. It just means that the likes of ETH or BTC might not have as much influence that average crypto traders have been expecting. Most government institutions and big corporations often feel more comfortable with assets that don’t go up or down 10-20% within just a few days. They feel more comfortable trading crypto tokens that are backed by something else, such as backed by physical gold price, backed by fiat currencies, or backed by the profitability of traditional companies.
That’s exactly why the future of the financial world will be tokenized, but they won’t be highly dependent on speculative crypto price. Compare it to today, where altcoins are often highly dependent on Bitcoin price. Talking about Bitcoin's price, everybody knows it is mostly controlled by speculation. Big institutions don’t like it when everything is highly dependent on Bitcoin price action trends.
Even traditional crypto exchanges are also slowly transforming to cater to this new wave of crypto assets. Some of these crypto exchanges like Binance or Bittrex are exploring ideas of listing different security tokens or newer utility crypto tokens that are backed by the valuation of certain real-life assets. They know many big players prefer to take less risk, which will shape the future of our crypto-financial world.
In the end, nobody can predict the future. But, looking at how things are shaping up, it’s very likely that in the future, the concept of blockchain and cryptocurrency will be adopted more and more by institutions, big tech companies, and even central banks. However, the adoption won’t be like what we expect. It won’t be the likes of BTC or LTC that will become mainstream digital assets, but things like CBDCs, gold-backed crypto tokens, or tokens that represent profitability of companies, real estate, and other things like this.