19th July, 2021
After fierce resistance and more than a decade on the periphery, cryptocurrencies and the underlying blockchain technology are finally facing their major breakthrough.
Behind the sharp price declines that have characterized the market for cryptocurrency in recent months, there is positive news. After more than a decade of disappointments, according to several major banks and experts, many cryptocurrencies and the underlying blockchain technology are finally facing their major breakthrough.
Developments could send the largest currency – bitcoin – far down the ladder, forcing banks to rethink their business and create a myriad of new businesses and services facing consumers, it reads
“Over the years, there has been strong opposition from banks and authorities in particular. But now the cryptocurrencies are being taken more and more seriously by companies, authorities and financial institutions”, says Roman Beck, professor at the IT University in Copenhagen.
Since the launch of bitcoin in 2009, despite promises of numerous uses, cryptocurrencies have been relegated to a speculative and unregulated corner of the financial market.
But during the pandemic, the use of them and thus also the number of new coins exploded. There are now approximately 10,000 different cryptocurrencies and smaller coins registered on the CoinMarketCap site. In mid-2018, there were 1,500.
In May 2020, the value of coins used as a guarantee in payment intermediation, money transfer, invoicing or lending amounted to less than DKK 1 billion. dollars (6.1 billion), according to the site defipulse.com. Now there are for over 51 billion. dollars tied up in the solutions, and many of them are ethereum.
Large companies such as Coop and AP Møller-Mærsk are also increasingly experimenting with blockchain and cryptocurrencies to manage their supply chains.
In the financial market, according to Citigroup, the most well-known currencies are now recognized as an independent asset class.
In March, the US major bank Morgan Stanley opened up trading in cryptocurrencies for its major customers. In April, the largest cryptocurrency exchange, Coinbase, was listed in New York, and in May, investment bank Goldman Sachs also began to create a currency market.
Thus, in June, the Chinese central bank banned the leading payment platform Alipay and the country’s banks from trading in and providing services to crypto companies. Authorities in both the United States and the European Union have also announced action.
Nordea and Citigroup also expect China’s central bank to launch its own digital currency as early as next year.
It will force central banks in the US and Europe to put a turbo on their own solutions, which in the extreme can suck large sums of deposits out of the commercial banks.
Digital money will be part of the future. That is what all parties are acknowledging. That is why the authorities want to put them under a more regulated layer.