There have been several discussions regarding the benefits of cryptocurrencies, but only a few are related to its risks in the world economy. In the previous years, there were only limited discussions on its status of whether to regulate their use or completely eliminate them as a form of payment.
The rising cryptocurrency markets have been a minor attraction to the actual economy and financial markets. Bitcoin and other cryptocurrency prices have gone up, but it is slowly taking effect on normal people. As of now, regulators of countries are still more optimistic about the new technology.
A number of corporate companies with publicly traded shares are beginning to make a verdict to show that they support the usage of cryptocurrencies. Markets are starting to reward those institutions for their decisions. Central banks of other countries are working on their own projects to make a local digital currency.
Nursultan Nazarbaev, president of Kazakhstan, made a proposal that would create a common international currency which would avoid trade distortions and put an end to currency wars. However, people who are not involved will also suffer if by chance this Cryptobubble bursts.
Possible dangers of Cryptocurrencies
Several economists are suggesting that Bitcoin can be used a tool for money laundering outside a country. Central banks across the world are already worried about Bitcoin being an unpredictable and unmanageable form of currency. They might lead to loopholes in a bank’s data about transactions leading to inability to monitor economic activities.
Just earlier, central banks enabled almost all monetary transactions, but the scenario was currently changed with Bitcoins evolution. The vested power of central banks and the governments are moving to the masses power to alter the structure of the economy.
This economic power can be challenged by people with the use of cryptocurrencies, leading to the creation of a new self-governing body which can make financial transactions at ease. Bitcoin might lead to money politicization if digital currencies are adopted on a large scale.
Bitcoin, Litecoin, Ripples and Etherium and other digital currencies are currently experiencing a mainstream adoption, markets capitalization, and growth in price. However, as the rally has spread from bitcoin which lead companies to bid resources in the economy, people will witness its real influence on the economy.