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Today, we discuss if crypto will ever replace traditional money like the US dollar. Listen to episode 45 first, where we highlight the differences between both.
There are two ways that crypto can replace traditional money: Either by governments making it their official currency, or by crypto simply overtaking traditional money in terms of usage. So, how likely is either scenario?
In some countries, like Venezuela, crypto is already officially adopted. But will larger economies like the United States ever change over to crypto? Interestingly, some cities are paving the way - Miami recently launched its own Miami Coin for example. If that trend continues, it is very possible that the United States would move the traditional Dollar to the blockchain – but it will likely still be fully controlled by the US government, making it a mix of both worlds: New technology, but old ways to centrally manage it.
Now, let’s say the government sticks with the traditional US dollar: in that case, will we ever see a fully decentralized blockchain take over anyhow? Probably, but it may take a while. The advantages of lower transaction costs over Credit Cards may be enough to convince people to mostly use crypto. Or it could be the ability to build entire financial systems without having to pay the bankers on Wall Street handsome salaries. But it will take a clear regulatory framework that outlines what can and can’t be done, so developers can build with confidence.
And next time, we talk about Miami Coin – what it is and why the city created it.
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.
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