The current money system is fragile, according to German central bank Deutsche Bundesbank. By 2030, the bank sees digital currencies rising four times to over 200 million users.
There is no longer doubt that digital currencies will eventually replace cash in future, as demand for anonymity grows and a need for more decentralised means of payment soars.
This year, we have seen Bitcoin appreciating past $55,000, making me predict that in the next five years it will be past $200,000, given the current rate of institutional buying. Deutsche Bundesbank notes that cryptocurrencies are currently just additions to the current money payment system, but in the next decade they could be replacements.
Deutsche Bank prediction that the number of cryptocurrency users will rise sharply in the next ten years, is similar to that of the internet in its first 20 years. The parallels between the Internet and crypto are stunning. Until early 2000, the Internet was publicly funded and primarily used in an academic setting.
But enlightened policymakers decided to legalise commercial activity on the Internet. While the Internet’s commercial use started with most people and businesses not knowing how to connect or use the Internet, the rails were put in place that would eventually change the future of everything.
The breakout years of simplified cryptocurrency usage are not far away. Look at Kenya, for instance. With over 40 percent smartphone penetration, mobile internet becoming cheaper and an existing tech-savvy population, the preconditions for huge crypto uptake in future are already set.
But, for all this to happen, the billion-dollar question remains. How will governments approach cryptocurrencies?
Most African governments have banned the use and trade of crypto, but that has not cowed the upsurge in usage. More and more Nigerians, Ghanaians, Kenyans, Ugandans and South Africans are making money deep inside the Bitcoin-blockchain.
But for Deutsche Bank’s prediction to come true, African countries need to legitimise cryptocurrencies, as you can no longer stop something that big companies such as Tesla and Mastercard see financial potential.
It is true that technology has always come before regulation, but if a technology seeks to boost financial inclusion, give financial power back to the people and kill centralised systems where corruption thrive, then it needs to be legalised for mass adoption.
This will not take long. As regulatory hurdles are surmounted, cryptocurrencies may become legitimate substitutes for fiat currency. Many governments will not sit by and lose control of the money supply without a vicious fight. Libra and other stablecoins may ultimately provide the road map to more widespread adoption, with stronger oversight by government regulators.
So, start thinking about the end of banknotes as we know them. Though banks are only thinking about this concept now, the cryptocurrency community has known it for a while and prepared in advance.
The real victim of crypto may not be fiat money, but banking cards. Cash, credit and debit cards will become obsolete till they are entirely replaced by cryptos such as Bitcoin, Ethereum, Bitcoin Cash, Dogecoin, Litecoin, Ripple among hundreds of digital coins that exist in crypto exchanges today.
The rise of mobile payments through WeChat Pay, AliPay and Paypal already makes plastic cards redundant. And WhatsApp Pay is not far from the game.
As cryptocurrency adoption increases, it’s only logical to assume that all the other forms of payment will completely disappear in the next two decades.
We don’t need them, we won’t need them because nobody can stop the current crypto revolution.
Mr Suri is the CEO of Maser, a tech company.