According to a report by a Deutsche Bank strategist, digital currencies may replace fiat money by 2030.

In a report entitled “Imagine 2030”, Jim Reid discusses the challenges faced by the existing fiat system and contemplates the rise of cryptocurrencies.

The fiat system could well unravel in the 2020’s

In the paper, it is speculated that the current fiat system could well unravel in the 2020s, as the world deals with economic challenges driven by an ageing population, the end of low labour costs, high profit margins and low corporate taxes, and a drastic redistribution of power away from Europe and towards the US and China.

Digital assets still face major challenges

However, Reid also identifies several major hurdles that digital assets need to overcome in order to truly go mainstream and replace fiat currencies.

For starters, he argues they need to gain more legitimacy in the eyes of governments and regulatory authorities, which will require more stability. He suggests that partnerships and alliances with established stakeholders like mobile apps and card providers will catalyse this process.

He also points to more dramatic challenges – namely the dependence of digital currency-based systems on electricity, and their vulnerability to cyberattacks and digital warfare.

Quantum computing and AI

The report also notes the issues around quantum computing that are keeping policy makers and security experts awake at night (read more), predicts that AI will shake up sports statistics and analysis in sports like football, hockey and rugby (read more), and suggests arts degrees will become more popular as students realise they can’t compete with AI in technical subjects, but humans still have the edge when it comes to morality, ethics and creativity.

We highly recommend reading the full report here – it’s quite a long read, but fascinating!

AYO.NEWS says:

Of course, some countries are already well on the way to introducing central bank digital currencies. From the tiny Marshall Islands who have already introduced a digital currency, the sovereign, alongside their existing fiat system (read more), to China which is thought to have a digital renminbi waiting in the wings ready for imminent launch (read more). 

However, making such a massive change as shifting from a fiat-based global economic system to a digital currency-based one is always going to be disruptive and face reactionary pressures. While digital assets and blockchain technology do indeed offer the promise of making the world a fairer place and addressing many of the causes of inequality, particularly corruption, during the change there are likely to be many who become victims of unintended consequences.

Whether the world has the stomach to face these challenges, especially at a time when there is an historic lack of strong leadership and increasingly stark social animosities, remains to be seen…

AYO.NEWS says features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited.