The nature of the global financial ecosystem is constantly changing. Since first introduced thousands of years ago, money has constantly evolved, but has also advanced along one common thread. Governments have always controlled how currency works. Cryptocurrency, which has now celebrated its ten-year anniversary, breaks the monetary paradigm and puts control of currency in the hands of consumers. A recent YouTube vlog by Steve Forbes, one of the world’s most prominent experts on financial systems, indicates that digital currency is undoubtedly going to change how currency is viewed and FinTech expert Jason Simons agrees.
Forbes explains that governments have not been doing a great job managing financial solutions, forcing inflation to increase as a result in many countries. Says Simon, “As Forbes points out, a new digital currency is coming that will replace government-made money. It will likely be tied to something like gold or perhaps even the Swiss franc, but the end result is the same. Privately-led currency will become more prominent going forward.”
The introduction of public cryptocurrencies, such as Bitcoin, is not the same as the introduction of a central bank digital currency (CBDC), a concept that has already begun in a number of countries. These alternatives run the same risks as government-created fiat since they would likely be held to the same development model. The inference that artificial inflation would be seen with a CBDC is a legitimate concern.
Adds Simon, “Forbes asserts that a CBDC issued by the US government would be destined to failure. It would be no better than the paper fiat currently issued, following the same path of destruction seen with today’s money. As the financial wizard concludes, cryptocurrency might very well be the kryptonite to government-backed currency of any kind.”