The Way Economists are Seeing the Impact of Cryptocurrency in a Nation

Cryptocurrency is getting its fair share of popularity and market interests. Today, there are increasing number of businesses and companies that are accepting cryptocurrencies as another method of payment. With trial and error as well as deeper knowledge in such, it gives investors confidence like WOT Asia and several other private institutions to use and navigate through cryptocurrency market.

A Start of New Era

Both blockchain empowered solutions and blockchain technology itself are now revolutionizing value exchange mechanism. In traditional methods of performing financial operations and government issued currencies that are backed by financial institutions similar to banks, this is literally a big hurdle they have to overtake. It isn’t longer possible to minimize or disregard the existence of cryptocurrency. This is true now that it is quite popular in people around the world.

But the question is…

What are the possible impacts of cryptocurrencies on global economy?

Let me give you a couple of points to ponder

Challenging the Dollar

US Dollar is the leading and dominant currency for quite some time. Also, it is the reserve currency of world’s economy. This is integral in centralization of global market. With this in mind, the world is sure to experience its wrath when a negative development transpires in US financial market.

Crypcurrencies like Bitcoin, Ethereum, Ripple and the likes are decentralizing financial transactions. It’s not reliant on US Dollar or any other currency for that matter. With the continuous growth in adopting cryptocurrencies, global market might no longer have to depend heavily on US dollar. This is going to change the landscape of foreign relations, most specifically, how we do financial trade. Furthermore, if other governments jumped into cryptocurrency market, it may potentially weaken the influence of US in the world.

Risk to National Currencies

Monetary policy of a given state is given thorough consideration. It’s not really a surprise for this has big impact on currency exchanges, rates of interests as well as money supplies. This additionally has an effect on several other things similar to the unemployment and inflation rate.

Values for cryptocurrencies aren’t tied to national currencies. At the same time, there’s no body of government that is overseeing it. Therefore, it’s safe to say that cryptocurrency is free from monopoly or control. If people begin to rely on cryptocurrencies than on national currencies, then this will cripple various countries as well as their economy. Arguably, this may put the economic independence of countries in question.

A Possible Solution

With these potential threats, government-backed cryptocurrencies may become possible in near distant future. Countries might opt to create cryptocurrency of its own in developing autonomy from world’s financial system.

Posted by Ness Shantel