Q: How do you think various countries’ launch of their own cryptocurrency would affect Bitcoin and Ethereum?


  • Community Manager

    Few would argue against the need for some regulatory oversight in the whole industry, but a move to a world of centralized cryptocurrencies would most likely not sit well with the crypto community.

    Wondering what our crypto traders/HODLers here think --

    With the existence and emergence of national cryptocurrencies which could (we may see deviations though) essentially be a stray away from the initial decentralisation promise of many crypto projects, and with the power that authorities still possess in banning exchanges etc.:

    • Which aspects of fiat do you foresee to be similar/different to that of national cryptocurrencies to come?
    • What opportunities lie in the mainstream (or first, national) adoption of national cryptocurrencies?
    • How possible is it that cryptocurrencies would 'retreat' to the dark web? (Not that it's ever left)


  • @kaeley-wn Exactly my fears, we shall see. We may see national cryptocurrencies taking the mainstream spot but it's quite clear that crypto can serve developing economies which have little to no top-down banking infrastructure.



  • There multiple levels of discussion here with two major ones. One is on impact on cryptos, the other is on moving away from the initial promise of cryptos. I will start with the former.

    Which aspects of fiat do you foresee to be similar/different to that of national cryptocurrencies to come?

    I doubt it will be quite different. I see it as an evolution of money. The pace of digitalization in society is so rapid. With the wide adoption of cashless payments etc, Digital currency should not be a very far stretch. The issuance of state-backed digital currency can become the next milestone for the central banks. In Singapore, MAS is already exploring it 3 years back. We can read about it here.
    https://www.mas.gov.sg/schemes-and-initiatives/Project-Ubin

    What opportunities lie in the mainstream (or first, national) adoption of national cryptocurrencies?
    National cryptos does replace the need for sound financial policy.

    Marshall McLuhan once wrote
    "The new media and technologies by which we amplify and extend ourselves
    constitute huge collective surgery carried out on the social body with complete
    disregard for antiseptics"
    Cryptos is the surgery we are undertaking in this case without fully understanding its consequences. We have to take to into account the theoretical benefits may not actually bring about a good change to the current system.
    How widespread usage of technology is also a consideration. After all, unequal access to technology often means unequal access to the benefits of technology. Ironically, the countries with poor fiscal policies (i.e South America) where Bitcoins and the likes would benefit most are probably the one with the most unequal access.

    How possible is it that cryptocurrencies would 'retreat' to the dark web?
    I think crypto is here to stay in the long run. However, just like shadow banking, it will exist.

    The latter:
    Initial decentralised promise of cryptos project are far from becoming a reality. Claims that crypto removes the need for trusted intermediaries hence democratises finance is delusional to some levels.

    Most Bitcoins, Ethereum etc are traded on a 'centralised' exchange (with an intermediary i.e binance vs decentralis i.e IDEX) and through a wallet which are arguably less trustworthy than a bank (operating with a similar structure akin to banks with little experience with no regulations). Buying/Selling cryptos on exchanges are risky as they can be manipulated, frauded etc. Solution to this is the 'Holy Grail', decentralised exchanges.

    According to tokeninsights, centralized exchanges still account for more than 99% of the market share. https://tokeninsight.com/report/712?lang=en
    Liquidity is a major concern in decentralized exchanges. (Current structure discourages liquidity)

    Most will agree that crypto facilitates crime and money laundering activities. Ironically, this is held in check by its biggest flaw: its high dependency on centralised exchanges for its liquidity.

    For decentralisation to truely take place in the eyes of regulators, someone has to be subjected to AML regulation. Since, it will be purely peer to peer, the active developers may be held responsible for AML failings. And then, we are stuck in a loop.
    https://rusi.org/publication/occasional-papers/intention-action-next-steps-preventing-criminal-abuse-cryptocurrency


 

Looks like your connection to Crowdfund Talks | A Community for P2P Lending & Alternative Investments was lost, please wait while we try to reconnect.