Financial analyst Jim Reid of German bank Deutsche Bank says that cryptocurrencies will replace cash by 2030 and there will be 200 million users of Blockchain wallets.
In a new 84-page research paper on 24 alternative ideas for the next few years entitled “Imagine 2030,” Deutsche Bank analyst Jim Reid offered a bullish outlook for cryptocurrencies over the next decade and that will also replace cash.
The media Bloomberg noted that Reid believes that the new asset class could prosper in the 2020s due to the impending disappearance of fiat money.
Reid explains that the growing doubts about the sustainability of the currencies backed by governments could be aggravated by more inflation, which could lead more people to digital assets.
For Deutsche Bank, crypto will replace cash in 2030
For Reid, the forces that held the fiat system together now seem “fragile,” and it is likely that the era of government-backed currencies is coming to an end.
So far, cryptocurrencies have been additions, rather than substitutes, to the global money inventory. Over the next decade, this may change.
In addition, Reid predicted that gold and cryptocurrencies, generally considered safe haven assets, are in a position to explode in a “violent reaction” against fiat currencies.
However, to gain greater acceptance, digital assets must overcome some obstacles, according to Cointelegraph. In principle, the perceived legitimacy in the eyes of governments and regulators, which implies price stability and allows global reach in the payment market.
Overcoming regulatory obstacles will expand its attractiveness and increase the potential to eventually replace cash. At the same time, Reid noted that with widespread adoption new challenges will arise.
Among the main threats to the supposed digital financial system, Reid mentioned the dependence on electricity, cyber attacks and a digital war.
“While that happens, the line between cryptocurrencies, financial institutions and the public and private sectors can become blurred.”
Banks also yield
The analyst said that assuming that governments support cryptocurrencies and consumers want them, “adoption rates will boost the timeline for general use.”
To prove the point, the German bank included a chart that established the correlation between the growth of Internet and Blockchain wallet users. Through the data that began when both the Internet and Bitcoin entered the public eye (since 2011 for Blockchain wallet users), a close correlation can be seen between the two technologies.
In the data, Deutsche Bank estimates an increase in the current number of Blockchain wallet users. From around 75 million it would go to 200 million by 2030.
The bank added:
“The incentives of governments and card providers are such that digital currencies are inevitable.”