The cryptocurrency industry has been gaining notoriety lately. Even though the markets have been in decline for many months, cryptocurrencies continue to make headlines. It seems that the longer the crisis drags on, the more eyes are on these digital assets. However, if several people already predict the primacy of cryptocurrencies, the Ethereum co-founder does not seem to agree.
A major obstacle for cryptocurrencies
The importance of cryptocurrencies is growing every day. Since expanding these businesses, investors have been thrilled and everyone has jumped into the industry. However, the volatility of cryptocurrencies soon brought them down to earth. While they looked set for an exponential rise, the price of almost all cryptocurrencies suddenly plunged into a red line. Over time, the trend consolidates and the financial markets panic.
The decline in markets has many consequences, one of which is inflation. While major investors remain confident, others, on the other hand, start to get stressed and seek development options. Even the people most inclined to defend cryptocurrencies and believe in their dominance over the financial system shy away. Among them is Ethereum co-founder Vitalik Buterin.
According to him, traditional currencies will retain their supremacy over the financial system. In addition to being supported by the government, they have a solid foundation and are trusted by users. Despite the widespread adoption of cryptocurrencies, there is very little chance of them taking over the global financial market. Therefore, the unconditional support of some market players as well as that of some states will not be able to put cryptocurrencies at the top of the world.
The biggest barrier to crypto assets remains regulation. Since the collapse of the Earth ecosystem (LUNA), the need for regulation has become a necessary measure for the functioning of the sector. The damage caused by this fall is estimated in millions of dollars. Therefore, the domestication of this sector becomes urgent, especially for its development. Although some investors believe that the current decline will allow the market to bounce better, some are not so sure.
CBDC to curb the spread of digital resources?
It is clear that cryptocurrency creation is not suitable for everyone. Indeed, many governments and financial institutions have a weak view of them. Until recently, the Bank of England was showing its hostility towards cryptocurrencies and all their derivatives. For some people, they are doomed to failure and could lead to heavy losses. Investors who invest their capital in it must be prepared to lose it.
Despite the cavalier warnings and advertisements, others are determined to exploit their potential. Meanwhile, governments are looking for a way to stop the rise of cryptocurrencies, especially in the face of traditional financial products. For this reason, they all turn to CBDCs. For them, only the deployment of central bank digital currencies to curb the dominance of cryptocurrencies.
It is in this context that Vitalik Buterin’s statement fits. According to the Reserve Bank of India (RBI), the emergence of CBDCs will end the supremacy of cryptocurrencies. Cryptography is an irregular in perpetual motion. This uncertainty undermines the plans of some governments accustomed to having control of funds. Current market turmoil and bitcoin (BTC) dropping below $ 19,000 doesn’t help. They could also be an important argument for detractors of these assets.
As the creator of a successful cryptocurrency and blockchain, Vitalik Buterin would be expected to see cryptocurrencies on top of the world. However, he believes they have no chance of dominating the global economic system. Given the relentlessness of governments to maintain control over the economy, the chances of these assets are diminishing. His claim of him doesn’t mean, however, that he doesn’t believe in the potential of cryptocurrencies. Away from there!
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The world is changing and adaptation is the best weapon to survive in this undulating universe. As the crypto community manager at the base, I am interested in anything directly or indirectly related to the blockchain and its derivatives. To share my experience and introduce a field that fascinates me, nothing better than to write informative articles and relax at the same time.