Virtual currencies are growing more and more popular. For example, a bitcoin that was worth $9,300 USD is worth more than $50,000 today. The increase in the value of cryptocurrencies like Dogecoin and Bitcoin is a direct result of people’s mistrust of paper currency, especially during the coronavirus pandemic, which has lead to high amounts of inflation. The growth of cryptocurrencies is inevitable, and it is important that we get used to it in order to keep up with the international competition and to secure our wealth in the digital future.
If the COVID-19 pandemic has thought us anything about the economy, it is that it is unstable. This is why it important to get used to cryptocurrency, with low amounts of inflation, because its growth is seemingly inevitable. According to Mengqi Sun, of the Wall Street Journal, “The Office of the Comptroller of the currency is homing more regulatory guidance will help traditional banks warm up to cryptocurrency.” Organizations like the OCC and the Department of Treasury, are recognizing that cryptocurrency is the future, especially in the post-coronavirus world. This was stated by Brian Brooks who was the acting Comptroller of the Currency. Sun quotes, “The growth and adoption of cryptocurrency is inevitable, said Mr. Brooks, who previously served as the chief legal officer of digital-currency exchange Coinbase Global Inc.” Helping banks and other financial institutions get used to cryptocurrency is seen as a priority to many officials who work in finance. This is one reason why it is important to get used to cryptocurrency.
Another reason to adopt cryptocurrency is to keep up with the competition on the world stage. For example, one of America’s biggest rivals, China, recently announced a digital currency amidst the pandemic. “In April, China’s central bank introduced the “digital yuan” in a pilot program across four cities, becoming the world’s first major economy to issue a national digital currency,” writes Aditi Kumar for the Los Angeles Times. This development in China puts the United States on the defensive. Furthermore, it isn’t only China that is warming up to cryptocurrency. Many other countries are slowly adapting to this new form of currency. Kumar states, “A survey by the Bank of International Settlements found that the majority of the world’s central banks have begun exploring a national digital currency. As China further refines its digital yuan architecture, nations seeking to leapfrog development of digital currency and payments systems will likely seek out Chinese, not American, financial technology.” If America wants to stay number one, we need to get used to cryptocurrency as soon as possible. This is another reason why it is important to adopt digital currencies.
Lastly, a lot of people are starting to trust digital currencies more and more, as their faith in paper currency decreases. Cryptocurrencies like Bitcoin have skyrocketed amidst the COVID-19 pandemic. Paul R La Monica writes for CNN Wire Service, “The price of one bitcoin is now hovering around $9,300. Bitcoin is up nearly 10% this week and has gained 30% since the end of 2019. It’s the best start to the year for bitcoin since 2012.” The price of bitcoin has only gone up since then currently sitting at more than $59,000 USD. In fact, some estimates state that one bitcoin will be worth $500,000 by 2030. With these skyrocketing values for cryptocurrency, it is no wonder that more and more investors are investing their money in cryptocurrency. “Bitcoin, gold and other cryptocurrencies and precious metals have historically done well when investors bet that the value of big government-backed currencies will fall,” states La Monica. And inflation is very unlikely to happen with cryptocurrencies due to the fact that there a very limited amount of cryptocurrency which cannot be altered, and that transactions are very secure. This is another reason why it is important to switch to cryptocurrency in the near future.
Opponents of cryptocurrency say that cryptocurrencies are used to finance terrorist organizations. According to V. Arianti of the Diplomat, “In May 2020, the Philippine Institute for Peace, Violence and Terrorism Research (PIPVTR) reported that Islamic State (IS)-linked terror groups had conducted their first transactions in cryptocurrencies. According to the report, a terrorist-linked money laundering operation involving cryptocurrencies generated funds, which were then allegedly used to finance the activities of terror networks operating in the conflict-ridden Mindanao region in the southern Philippines.” However, it is important to note that any type of currency could be used for illegal transactions. And cryptocurrencies like Bitcoin are less likely to be used in illegal transaction due to the fact that transaction is verified by multiple users through a process called mining. The security of digital transactions, along with a lot of other factors, prove that cryptocurrencies are not the problem, it is the people behind those transactions who are the problem.
When we get used to bitcoin, we will be able to keep up with competition and secure our wealth in the digital future. These are some of the reasons why it is important to get used to cryptocurrency
Sources:
- Sun, Mengqi. “This Regulator Wants to Help Banks Embrace Cryptocurrency.” Wall Street Journal Online, 06 Oct 2020. SIRS Issues Researcher, https://explore.proquest.com/sirsissuesresearcher/document/2451444282?accountid=193938.
- Kumar, Aditi. “Why China’s ‘Digital Yuan’ Puts Us on the Defensive..” Los Angeles Times, 06 May 2020. SIRS Issues Researcher, https://explore.proquest.com/sirsissuesresearcher/document/2398960992?accountid=193938.
- La Monica, Paul,R. “Bitcoin is Soaring as Investors Panic about Coronavirus.” CNN Wire Service, 01 Feb 2020. SIRS Issues Researcher, https://explore.proquest.com/sirsissuesresearcher/document/2365744053?accountid=193938.
- Arianti, V. “How Terrorists use Cryptocurrency in Southeast Asia.” The Diplomat, 30 Jun 2020. SIRS Issues Researcher, https://explore.proquest.com/sirsissuesresearcher/document/2441638324?accountid=193938.
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