The cryptocurrency market is recovering after a three-month market lull that started in May. The dip was preceded by hassles from Chinese authorities against Bitcoin mining, and Elon Musk’s critical comments on Bitcoin including the discontinuance of Bitcoin payments at Tesla, EV manufacturer.
Bitcoin broke above the $50,000 price mark last Sunday, for the first time since May. Notably, massive gains on the prices of some altcoins such as Ethereum, Ripple (XRP), Binance Coin (BNB) helped the entire market capitalization leap above $2.1 trillion, a more than $1 trillion increase on July’s figure.
Transition to Digital Currencies Seismic, Survey Reports
In view of the latest market uptrend, a survey
featuring the majority of banking executives has found that a large percentage of these execs are of the opinion that Bitcoin and other digital assets could displace fiat currencies like reserve currency, US Dollar, with a projection of between five and 10 years. This trajectory- already happening- has been described as ‘seismic.’
According to accounting firm Deloitte, there is an ongoing ‘seismic’ transition in financial services spearheaded by emerging blockchain-based digital assets. In its report, Deloitte showed that 76% of financial experts think Bitcoin and other cryptocurrencies will exist as an alternative to or total substitute for fiat currencies within the next half-decade.
81% of the 1300 banking execs whose views were polled think blockchain technology, a pivot behind cryptocurrencies, is capable of scalability and has been well-received in the mainstream space. 73% of the respondents opined that it is important for their companies to adopt digital currencies and blockchain in order to retain competitive advantage.
Linda Pawczuk, head of global Blockchain and Digital Assets Practice at Deloitte stated in the released report that the legacy system has outlived its usefulness. As such, industry participants must adapt to new means to drive growth economically.
More Countries Embrace Blockchain-inspired CBDCs
Meanwhile, major US banks such as JPMorgan and Goldman Sachs are actively involved in lining up crypto investment products for their customers. Also, there has been a widespread interest across the globe in central bank digital currencies (CBDCs) utilizing blockchain technology. In that regard, China is leading the race with its Digital Yuan or e-CNY.
Interestingly, the Asian giant has begun trials for the CBDC, with the first phase completed in early August. China’s PBOC, apex bank in charge of the trial program, reported that it conducted over $5 billion worth of transactions during the first phase. More banks and Chinese firms are joining the e-CNY pilot. China is also eyeing distribution of the Digital Yuan during the 2022 Beijing Olympics.
Singapore, Cambodia are trailing behind China, but the US is still assessing the implications of a Digital dollar. A Fed report on a potential digital dollar is due for release by September. As per US Fed Chair, Jerome Powell, it is more concerned about getting things right than done in a hurry.
Deloitte’s report also notes that a global adoption of digital assets is inevitable, and that ‘the future is happening right now.’