One of the issues that cryptocurrencies have in terms of wide adoption is the lack of trust from regular participants of the economy. Common folks who are not educated about crypto assets and blockchain simply do not believe that they can use something like Bitcoin daily. However, with good marketing and public trust, the moment when cryptos are widely adopted can come sooner than we anticipate.
The IMF representative said in the report by Bank for International Settlements that the combined power of the banking system that has trust from the public and the flexibility and scalability of crypto technology could create a new ecosystem that would be more diverse and efficient.
The report states that crypto assets demonstrate that technical capabilities are quite impressive and often groundbreaking. However, the lack of any centralization and regulation makes it hard for many institutionalized investors to jump in and prevent regular users of fiat currencies from seeing digital coins as a solid alternative.
The BIS says that Central Banks should look into opportunities to employ digital currencies and create a solid foundation for a more efficient economy where transactions are carried out by blockchain network in a secure way but involve the money in possession of central banks. Many experts in the field of banking think that the technology behind crypto is more than just noteworthy and should be explored further.
Currently, crypto assets are too volatile to be considered reliable by most investment institutions let alone banks that want to hedge against risks and have access to more stable instruments. However, if many national banks will enter the industry and provide support for these digital infrastructures, it is possible to reduce volatility and introduce much-needed regulatory mechanisms.
Even diehard crypto enthusiasts will have to agree that the lack of any regulation is detrimental to the industry. While we do not need any centralized authorities to dictate how to use our money, we also need some forms of self-regulation on exchanges and more rules and guarantees to attract more investors that will push crypto closer to wide adoption!
