Deutsche Bank has publicized a report that the next decade could bring the end of the fiat currencies. Are their analysts, right? And what is the part that cryptocurrencies will play in that? Let’s find out in the altcoin news below.
A special edition of Konzept, Imagine 2030, released by the research team at German banking giant Deutsche Bank, insinuates that some factors that have made possible the existence of the fiat money system since the 1970s are starting to weaken. With the fall of the gold-based Bretton Woods international monetary system in the early 1970s, national currencies were de-linked from precious metals like gold. It’s a substitute, fiat money, were based on the belief in the ability of the government to maintain its value. The independence of fiat currency from any inherent backing has introduced the problem of inflation.
Governments obtained the liberty to print as much or as little money as they wanted in response to alleged economic needs and goals. Society has become so accustomed to the concept that prices rise forever, that is easy to forget that, only in few events of turmoil, inflation did not significantly exist before the freeing of the fiat from its backing by precious metals.
Deutsche Bank implies that the fifty-year fiat system that gave birth to inflation and that contained financial collapse, has been held in check by “a fortuitous set of global forces across multiple decades that have created sizeable natural offsetting disinflationary forces” not by the governments. Having the whole global economy and its workforce confronting runaway inflation or crippling interest rates and recession, a fall of confidence in the fiat currency system can arise.
Cryptocurrency would stand to profit from the end of fiat currency as the multitude of people search for a path to evade the unavoidable monetary disaster that inflation would bring and to keep their hard-earned money. The hazardous position that the international economy faces could have the consequence of revolutionizing the system and giving new chances with a new system that puts trust in code, instead of politicians. The end of fiat currency could be near, and the demand for cryptocurrencies can skyrocket as a consequence.
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