Faced with dismal economic projections that show that the global economy will shrink by 3% in 2020, much worse than during the 2008-2009 financial crisis, adoption of technologies that can boost efficiency and optimize procedures is accelerating.
According to Stanford Business School professor of finance Darrell Duffie, digital currencies, which are programmable, cryptographically secure and easily cross-border, will continue to demonstrate their advantages over fiat currencies and paper systems.
In a video clip titled “Digital Currency Goes Mainstream,” Duffie says banks don’t need to be at the forefront.
“Why would the banks disrupt themselves by introducing a digital currency that would make it easier for consumers and businesses to disintermediate the banks? Well, the banks may not be the innovators. They may be the reactors, they will react when others innovate.
But I am sure they have considered the trade-offs of disrupting themselves by introducing digital currencies, or weighing and responding when others introduce digital currencies. “
Eleven years after the release of Bitcoin, digital assets are still trying to reject its critics. Almost two years ago, in a July 2018 interview with Swiss-German news channel Basler Zeitung, Agustín Carstens, the general manager of the Bank for International Settlements, pleaded with young people to ‘stop trying to create money’ and commented: ‘ It is a misconception to think that money cannot be created out of nothing. ‘
Now that the corona virus has ushered in a new era of quantitative easing with trillions falling from the sky, that argument has lost steam and developers in the crypto community continue to build products and platforms that can compete with, replace and complement existing financial products and services or create entirely new options.
Duffie says the world has gone beyond characterizing digital currencies as an alternative movement.
“It is going to be the mainstream and so the banks, especially the biggest banks, are very aware of that. They are investing in the technology and they will provide this service as soon as it is profitable enough after looking at the cost of losing of part of their current business that they are going to disrupt.
Banks will eventually lead or follow, but they will be involved. They cannot avoid it. “
Disclaimer: Opinions expressed in The Daily Hodl are not investment advice. Investors should exercise care before making risky investments in Bitcoin, cryptocurrency or digital assets. Please be aware that your transfers and transactions are at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend buying or selling cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Keep in mind that The Daily Hodl participates in affiliate marketing.
Featured image: Shutterstock / Ollyy