Governments had good reason to be wary in the early days of Bitcoin and its underlying blockchain technology. Research from Oxford shows that in the early years, half of Bitcoin payments can be linked to illegal activities. More than 75% of blockchain start-ups that emerged during the hype turned out to be outright scams. As a result, investors ( often consumers) lost their money. Because there was no regulation available, billions of dollars of money were laundered via digital currencies.
But with the announcement of the Libra project, initiated by Facebook, and the Chinese government's major U-turn on blockchain (from banning to embracing), digital currencies have quickly been taken out of the shadows and put on the priority list by many central banks.
A digital euro was always considered a curse. Until Mark Zuckerberg got involved. – De Correspondent
Where Facebook has recently been severely reprimanded for its Libra project by governments worldwide, governments have been rapidly developing their own digital currencies. China has even successfully completed several tests . In addition to an 'answer' to Libra, the disguised basic incomes that countries such as Spain and the United States distribute to their populations are seen as a motivating reason for governments to introduce digital currencies extra quickly.
Power shift
The Chinese DCEP project is currently not only the uae telegram data most developed of all so-called 'Central Bank Digital Currencies', but also causes another power shift on the global geopolitical level from the United States to China. Tegenlicht previously paid attention to this in ' The Chinese Dollar ' and predicted that the Chinese Renminbi will replace the US Dollar as the world reserve currency. A game changer that will cause a major financial earthquake worldwide .
It remains remarkable that a technology designed to make digital money possible without government intervention is now being used by governments to gain control over it.
It is not only governments that are driving innovation in the financial field. A rapidly emerging trend in blockchain land is ' Decentralized Finance '. This is the ecosystem of financial applications that is built on blockchain technology. This simply means that you can conclude all kinds of financial products and offer them yourself, without an intermediary. Think of loans, mortgages and insurance.
Where digital currencies such as Bitcoin initially gained popularity through 'peer-to-peer' payments, DeFi ensures that these financial products are made possible 'peer-to-peer'. No negative bank interest.
