Digital Central Bank Currencies (CBDC)
In addition to the USA, China and Switzerland, the European Central Bank (ECB) also plans to introduce a digital central bank currency to meet the demand for faster and cheaper cross-border payments. The ECB argues that technological innovations are rapidly changing the way retail payments are made. This includes the decline in cash payments. A digital central bank currency with legal tender status could guarantee that all users would in principle have access to a cheap and easy means of payment.
Regulation of the crypto industry
The German legislator is playing a pioneering role in the regulation
Crypto-assets. A new law brings legal clarity to financial institutions to be able to perform crypto-custody. The handling of crypto-assets in Germany is now subject to high regulatory requirements and standards that have been in force on the traditional capital markets for decades. Other countries such as Liechtenstein have already implemented similar laws. Dubious providers, such as those often encountered in 2017 in connection with ICOs (initial coin offerings), will thus be put a stop to their activities. Well-positioned Fintech start-ups, in turn, will find solutions and continue to grow.
Negative interest rates
As more and more banks are introducing negative interest rates, investors are looking for other ways to invest money. It is difficult to argue why a fund manager should not add crypto currencies to his portfolio. Bitcoin was born in an economic crisis (2008/2009) and will probably reach market maturity in a new economic crisis.
By 2025, the value added by companies through blockchain will grow to just over 176 billion dollars and then rise to over 3.1 trillion dollars by 2030, according to a recent forecast by Gartner.
Prof. Philipp Sandner of the Frankfurt School of Finance & Management recently said that STOs (digital securities) will replace the German stock exchange in a few years. Sooner or later, everything that has to do with finance will run on a blockchain basis. He is convinced of this. “We will certainly see the euro on a blockchain basis in 2021; we have already seen securities this year,” said Mr. Sandner.
Anyone who deals with blockchains today and positions himself cleverly can benefit extraordinarily from them in the next ten to twenty years.