Fiat money as we know it, including the world’s major currencies such as the dollar, may completely disappear in the next five to ten years, replaced by blockchain-enabled digital financial instruments, according to a forecast made in Deloitte’s 2021 Global Blockchain Survey, A New Age of Digital Assets. The survey canvassed over 1,200 CEOs from 10 countries, including Germany, the UK, China and the United States. A quarter of the companies surveyed are in the financial industry.
“The end of physical money as we know it represents an overdue — and now inevitable — upgrade. There is consensus among our cohorts that digital assets will replace fiat currencies,” Deloitte notes in the report.
As many as 76% of overall respondents as well as financial industry respondents believe fiat money will go; 78% of respondents believe “there is a compelling business case” for the use of blockchain and digital financial assets (DFA) in their companies or projects.
“The proliferation of digital ‘everything’ as both a means of exchange and a store of value has expanded significantly, with a seismic shift impacting the global financial services industry,” the report notes.
What is hindering DFA?
Many of the survey respondents said they expected to see significant positive impact from central bank digital currencies (42%), while 38% mentioned algorithm-driven stablecoins. According to the participants, the most obvious potential roles of digital assets will be to diversify investments, to create new payment channels or types, and to tokenize conventional assets. They also highlighted the new potential for solutions that involve custody of digital assets.
There is a series of obstacles on the way to introducing digital assets; the respondents believe they will be lifted within the next few years. 71% of respondents named cybersecurity, regulatory barriers (63%) and the insufficiency of financial infrastructure (62%) among the leading barriers to the acceptance of digital assets.
At the same time, 75% of those taking part in the survey believe that blockchain, digital assets and cryptocurrencies will inevitably become part of companies’ business strategies. 73% are confident that their companies would lose their competitive advantage if they abandon the introduction of blockchain and digital assets.
“The business imperative of adopting blockchain and digital assets is growing noticeably, as organizations increasingly accept that their current business models are at stake,” the survey says.
“I beg to differ with the forecast made by the respected consulting and audit company,” says Artem Genkin, Professor, author of the book Blockchain. How It Works and What Lies Ahead, and numerous monographs and publications on theories of money. “It rather seems that physical money will be left behind in the peloton of the global technological progress. However, the patterns of its use in various regional, age and social niches will remain inextirpable for at least one generation unless mankind overcomes the existing digital divide. Which is unrealistic because it would take trillions in spending for a decade in various regions of the world — and there is no universal consensus on its viability and the undivided authority of ‘world government.’ And it’s a good thing.”
The expert added that “the truly mind-blowing trend is the global and total digitalization of non-financial assets. Any result of intellectual activity, any object of the material world and even Homo sapiens itself (“the new oil”) receives an electronic doppelganger and becomes subject to evaluation, trade turnover and potentially market sale and purchase.”
By Olga Blinova