Dutch non-profit organization dGen says in its report that three or more nations will replace their fiat currencies with digital ones by 2030.
DGen, an independent non-profit research institute focused on blockchain research, has released a report examining the issue of government cryptocurrency issuance. The report, sponsored by the European Central Bank (ECB), Standard Chartered Bank and the Frankfurt School of Management and Finance, has made some important predictions about the impact of government cryptocurrencies on the global financial system.
DGen researchers predict that three to five countries will completely replace their national currency with the cryptocurrency of the Central Bank within ten years. DGen does not make precise assumptions about which countries will make this transition by 2030, but notes significant progress in the development of government cryptocurrencies in the Bahamas and Sweden. The think tank noted that the development of the e-krona in Sweden is in line with the country’s plan to phase out cash by 2025.
DGen suggests that the euro will be supplanted by the Chinese digital yuan if the EU does not create its own state-owned cryptocurrency by 2025. Analysts stress the need for the ECB to create “a suitable environment for the digital euro to flourish.” In their opinion, fiat currency risks losing its position in the world economy.
The head of the blockchain center at the Frankfurt School of Management and Finance, Philipp Sandner, criticized the ECB for its apparent inaction:
“The ECB is too slow to react. In particular, the advantages of the state cryptocurrency for the industry, for example, based on programmable money, are currently being ignored. Given the Libra and the DCEP [digital yuan], the ECB must react quickly to maintain its geopolitical position. ”
While China’s state-owned cryptocurrency poses a threat to the euro, the digital yuan is unlikely to replace the US dollar as the world’s reserve currency, according to the report. According to the think tank, the digital yuan has a low chance of surpassing the dollar due to “political unrest in China and efforts to move reserves.”
As a reminder, China recently began testing digital yuan payments for large commercial transactions. However, other countries are not lagging behind – the other day, President of the Central Bank of Brazil Banco Central do Brasil (BCB) Roberto Campos Neto announced that the launch of the state digital currency will take place in 2022.
