Whatever you think about bitcoin it won’t replace cash. At least, that’s what one of the Bank of Canada’s senior officials stated. Carolyn Wilkins, senior deputy governor at the BOC, said in an interview that digital currencies are definitely changing the world of finance but they currently have no chance of replacing fiat money. Wilkins said, “Money that’s worth the name to be called money really does have to be a medium of exchange, a store of value – and the digital currencies that are out there right now don’t fulfill them – bitcoin doesn’t, none of them do”.
The probability of bitcoin being massively adopted as a store of value and a payment instrument is negatively affected by its reliance on electric grid and insufficient security, Wilkins believes. Several countries — including Russia and China — as well as influential personalities have counted against the world’s most popular cryptocurrency going as far as calling BTC a bubble. Security issues, associated with the use of bitcoin in particular and cryptocurrencies in general, force governments to launch national cryptocurrencies of their own. Jamie Dimon, JPMorgan Chase CEO, even believes bitcoin will eventually crash to zero as a result of the government intervention.
Despite broad support in countries like Japan and Taiwan, bitcoin is unlikely to become the first global currency and replace fiat money. It does not, however, mean that the blockchain technology itself will soon be dumped. Quite the opposite, the latter can be expected to make its way to the decentralized systems of tomorrow and new, safer cryptocurrencies. As it will definitely continue to transform the global financial system.
