The world is changing at lightspeed.
And a recent survey of executive-level finance officials by the consulting firm Deloitte argued that digital currency will probably replace fiat currencies within five to 10 years, and that banks are running out of time to prepare.
However, the survey only involved 1,280 respondents, many of whom are likely on familiar terms with the idea of blockchain, bitcoin, and cryptocurrency, which could have skewed the results. So how do we know this projection is correct?
Broad adoption could be a barrier to digital asset dominance
“Deloitte’s 2021 Global Blockchain Survey affirms that banks should embrace their inevitable digital future,” said the report. “In a seismic shift, financial leaders increasingly see digital assets as the future.” Roughly 76% of survey respondents professed a belief that “digital assets will serve as a strong alternative to, or outright replacement for, fiat currencies in the next 5 to 10 years.” If the report is accurate, it would mean we’re on the cusp of a digital asset revolution, which means corporations (and consequently, in modern society) people who don’t prepare for the pivot might find themselves in financial trouble before the decade is out. To its merit, the survey also described several “barriers to digital assets acceptance,” including regulatory barriers, privacy, cybersecurity, legacy process and systems, financial infrastructure, broad adoption, and more.
And, despite roughly 47% of survey respondents thinking that broad adoption of digital currencies and assets are a major barrier, there’s some reason to take the potential economic pivot to digital seriously. More money than ever is being stored as digital assets, with crypto miners buying up power plants to feed the energy needs of the nascent industry. This is partially spurred by speculation on blockchain-backed NFTs, which came into prominence amid the COVID-19 pandemic and a colossal NFT frenzy that involved a wide spectrum of industries, from Elon Musk enthusiasts to the increasingly finance-centric situation of the art world.
Outsized influence on public consumer habits could direct interest in digital assets
Back in July, a panel of fintech (financial technology) specialists said that cryptocurrency will surpass money issued by central banks as the new global apex currency in less than 30 years, with 54% of the 42 participants anticipating a moment of “hyperbitcoinization” — a term coined to denote a moment when bitcoin becomes more dominant than global finance — coming by the year 2050. But yet again, it’s difficult to judge the future of money from the words of those who are likely more invested than most citizens of the world.
Looking beyond populations inherently concerned with financial trends, markets, and cryptocurrencies, it’s unclear what the average civilian thinks about the viability of pivoting away from fiat money, since, lacking an active investment in crypto, they are naturally less willing to respond to a survey on the matter than, say, a C-level official of a financial management group. But, if the outsized influence on Dogecoin’s popularity seen from Elon Musk, who famously maintains a strong fanbase among many who live far away from the frenetic financial markets of Wall Street and the big tech paradise of Silicon Valley hints at the future of public adoption, change could be a matter of who wields the greatest leverage on public consensus. Will bitcoin and digital assets achieve a greater role in society in the next decade? It looks that way. But will it dominate and replace fiat currency within 10 years? Hard to say, but it couldn’t hurt to consider diversifying what assets one has. We live in a time of unprecedented change and danger, and it’s when things are most chaotic and unpredictable that hedging your bets, very carefully, is not the most naive thing to do.