Deutsche Bank (DB), a German multinational investment bank and financial services company has admitted that digital currencies are the future of money. In a recently published report titled “Imagine 2030,” the bank noted that cryptocurrencies would dominate fiat currencies by 2030.
In the document, DB significantly stressed the end of fiat money. The end of cash plastic cards, and Cryptocurrencies: the 21st-century cash. The bank argued that the forces behind the traditional currencies are gradually falling apart.
The forces sustaining the fiat money system has become weak, especially the decades of low labor costs. “Over the next decade, some of these forces could begin to unravel and demand alternative currencies, from gold to crypto, could take off,” DB stated.
According to Deutsche Bank’s Analyst, Jim Reid, the current fiat system could only survive this long due to a fortuitous set of global forces across multiple decades, which created sizeable natural offsetting disinflationary forces.
Again, on the use of plastic cards, the Deutsche Bank predicted that these cards would soon be phased out completely, following the recent innovations on smartphones and other electronic devices, which renders these cards obsolete.
At the moment, the possibilities of cryptocurrencies becoming the 21st-century cash are still not close, as digital currencies are seen as additions, rather than substitutes, to the global inventory of money.
However, over the next decade, this may change, the bank said in the document, adding that digital currencies widen their appeal by overcoming regulatory hurdles, which also raise their potential to replace cash at the end.
Meanwhile, the bank further noted that the end of cash by 2030 wouldn’t happen completely, saying that there are several reasons why notes and coins will still be around at that time.
On the other hand, the former president of the European Central Bank, Jean-Claude Trichet, recently expressed uncertainty that cryptocurrencies will become the future of money.
Image: Deutsche Bank Research