The crypto sector has been gaining notoriety lately. Even though the markets have been falling for many months, cryptocurrencies continue to make headlines. It seems like the longer the crisis drags on, the more eyes are on these digital assets. However, if several people already foresee the supremacy of cryptos, the co-founder of Ethereum does not seem to agree.
A considerable obstacle for cryptocurrencies
The importance of cryptocurrencies is growing a little more every day. Since the expansion of these assets, investors have been raving about and all jumping into the sector. However, the necessity of crypto soon brought them down to earth. While they seemed set for an exponential rise, the price of almost all cryptos suddenly sank into a red line. As time passes, the trend consolidates and the financial markets panic.
Falling markets have many consequences, one of which is inflation. While the biggest investors remain confident, others, on the other hand, are beginning to stress out and look for development options. Even the people most inclined to defend cryptos and believe in their dominance over the financial system recant. Among these is Ethereum co-founder Vitalik Buterin.
According to him, traditional currencies retain their supremacy over the financial system. In addition to being supported by the government, they have a solid base and are trusted by users. Despite the widespread adoption of cryptos, there is very little chance that they will take over the global financial market. Therefore, the unconditional support of certain market players as well as that of certain States will not be able to put cryptos at the top of the world.
The biggest hurdle of crypto assets remains regulation. Since the collapse of the Terra (LUNA) ecosystem, the need for regulation has become a necessary measure for the functioning of the sector. The damage caused by this fall is estimated at millions of dollars. The approval of this sector therefore becomes urgent, especially for its development. Although a few investors believe that the current drop will allow the market to rebound better, some are not so sure.
CBDC to curb the spread of digital assets?
It is clear that the creation of cryptocurrencies is not suitable for everyone. Indeed, many governments as well as financial institutions take a dim view. Until recently, the Bank of England showed its hostility to crypto and all their derivatives. For some people, they are doomed to failure and could lead to heavy losses. Investors who deposit their capital there must be prepared to lose it.
Despite warnings and derogatory advertisements, others are determined to exploit their potential. Meanwhile, governments are looking for a way to stop the rise of cryptocurrencies, especially in the face of traditional financial products. Because of this, they all turn to CBDCs. For them, only the deployer of central bank digital currencies to curb the dominance of crypto assets.
It is in this context that Vitalik Buterin’s statement fits. According to the Reserve Bank of India (RBI), the emergence of CBDCs will put an end to the supremacy of cryptocurrencies. Cryptography is an irregular in perpetual motion. This uncertainty undermines the projects of certain governments accustomed to having control of the funds. The current turmoil in the markets and the fall of bitcoin (BTC) below $19,000 does not help. They could even represent a major argument can the detractors of these assets.
As the creator of a successful cryptocurrency and blockchain, one would expect Vitalik Buterin to see cryptos on top of the world. However, he believes they have no chance of dominating the global economic system. Given the relentlessness of governments to maintain control over the economy, the chances of these assets are dwindling. His statement does not mean, however, that he does not believe in the potential of cryptos. Far from there !
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The world is changing and adaptation is the best weapon to survive in this undulating universe. As a crypto community manager at the base, I am interested in everything directly or indirectly related to the blockchain and its derivatives. In order to share my experience and make known a field that fascinates me, nothing better than writing informative and relaxed articles at the same time.