The Digital Currency of The Future: Where Is It Heading?
by Sumona Finance 27 January 2022
Digital currencies have it big so far in 2021, but it leaves us questioning what’s next for the technology? By now, we have already witnessed cryptocurrencies, especially Bitcoin, hitting multiple all-time highs in market value, receiving regulatory talks about the potential to have a big impact on the industry, and so much more.
Regardless, the number of people who are now interested in cryptocurrencies has skyrocketed as it became a hot topic not only to investors but to some other popular cultures as well.
However, digital currencies are still considered by experts as a technology that’s still in its infancy, but it’s constantly evolving at a rapid pace. Regardless, it’s still relatively difficult to predict where the technology is going in the long run. In this article, we’ll take on how cryptocurrency will continue in the future.
What Governments Will Do About Crypto
Despite crypto’s existence for more than a decade already, many governments today initially took a hands-off approach towards the technology. However, since digital currencies have recently ascended their evolution at a rapid pace, especially with the rise of Decentralised Finance, regulators are now forced to start creating rules for digital currencies, which it’s a process that could potentially take years to finish.
Regulations about digital currencies could vary from one country to another, with some banks and government entities embracing the technology while others are banning any interaction with it. The challenge that regulators now face is to develop a set of rules that puts a limitation to the traditional financial risks, of course, without stifling innovation. Regardless, most governments around the world still haven’t taken any limited approach towards regulating cryptocurrencies.
For more information on the effect that new regulations could have on crypto, visit the wealth of information available on the Bitcoin Era.
Ever since the development of the first-ever digital currency over a decade ago, conversations have surged about how to regulate cryptos. There are already lawmakers across the world, especially in Washington D.C., that are trying to figure out how to establish a set of rules and guidelines to make crypto-related transactions relatively safer for all consumers while making it less appealing for criminals.
China, on the other hand, recently announced in September that the country will ban any crypto-related interactions and make the technology illegal. With that in mind, it immediately put all the brakes on every crypto-related activity within the borders of China.
Fortunately, things are less clear in the United States, and people are speculating that the government has not yet come to a decision or has no intention of regulating digital currencies in the country. However, there are conversations circulating that some agencies, as well as the Commodity Futures Trading Commission, want to partake in a role in policing the crypto industry.
Is Stablecoins the Answer?
Stablecoins are now slowly growing in popularity, especially as to how investors treat them as a way back to digital currencies with real value-holding assets, similar to how the U.S. currency used to be the gold standard.
Overall, the future outlook of digital currencies is still very much in question as there are people who see limitless potential about the technology, while there are critics that see nothing else but the risks involved. Regardless, the majority are certain that there are applications where digital currencies can succeed as a viable solution.
When it comes to the future of digital currencies, we can only speculate on what value the technology has for investors, especially in the coming months and years. Regardless, the reality is that cryptocurrencies are still a speculative investment, especially considering how highly volatile its market is, while also having no history on its market to base predictions on.
It doesn’t matter what people say about crypto, especially experts; no one really knows about its future and how it will end up. With that in mind, it’s important for you to only invest in digital currencies that you’re more than prepared to lose, as well as stick to more traditional assets to build your wealth for the long term. Never put cryptocurrency investments above any other goals you have financially, especially your savings for retirement or payment for your debt.