So there might have been an unspoken rivalry between cryptocurrencies and digital money. These assets have been pitted against each other since the idea of making virtual money was floated amid the rise in crypto trading. Users turn to trusted websites each day for various crypto coin predictions from experts like the Internet Computer Price Forecast from Cryptona. From China to Europe, there is no doubt that the rise of the virtual representation of money would be unstoppable. That is despite the hesitation of the United States to develop its own digital dollars. But why should there be an argument when crypto coins can collaborate with virtual fiat to establish harmony between the two worlds.
The Story of China
It was not a match made in heaven for the digital Yuan and crypto coins. It can be recalled that China banned cryptocurrencies in the country to pave the way for the launching of its own virtual money. The Asian economic giant made history for being the first in developing its very own digital note. Thanks to those fruitful years of research and development. Good thing everything went well that led to another historical milestone for the Chinese government.
For sure, you know that China is a conservative country. It is likely to protect its financial system from unregulated and decentralised crypto operations beyond its reach. This is why it has decided to develop its own version of a digital medium of exchange. The coin is called the electronic renminbi, which is the output of the Digital Yuan project that started several years ago. And there is no doubt that it was all a success.
The initial launching of China’s latest brainchild has been a delight to the locals. There was a lottery with coin giveaways worth over $6 million available to Chinese nationals. It was a trial run that led to interesting results. Good thing the public welcomed the new opportunity of using digital money through an application that is downloadable on your mobile devices. A partnership with local merchants was also forged to be able to expand the coverage of digital transactions.
Is there anything more? The e-renminbi will not exclusively be traded in China. Soon it will be available all over the globe. With the Beijing Winter Olympics next year, the government is gearing up for an international roll-out. It plans to launch virtual money to the world by introducing the e-renminbi first to Olympians. After all, it would not hurt to hit two birds with one stone.
The Story of the U.S.
Despite the hype around the development of digital money, you might be wondering why the United States is taking the back seat. Perhaps it can be attributed to the policy of neutrality being imposed by America when it comes to crypto operations. It is noteworthy that the state has remained neutral except in instances when the line between crypto and security trading has been allegedly crossed. You may want to check the popular case instituted by the Securities and Exchange Commission against Ripple. Nonetheless, XRP has been continuously in trade across several crypto exchanges.
In an interview, a top government official revealed that he does not see the need for the U.S. to come up with the digital dollar. The monetary system appears to be thriving well along with the rise of cryptocurrencies. There might not be a competition between the two, considering the two different worlds where they exist. So far, the two realms have managed to coexist in harmony. This might be one of the many other reasons why the necessity is not yet there.
The reservation of the U.S. Federal Reserve may also be attributed to some political factors. For instance, the agency cannot simply decide on whether to create digital currencies equivalent to the legal tender. There is a need for Congress to enact legislation that would pave the way for the creation of digital dollars. And the same will have to be approved by the executive. The process is not that easy, considering the many different bills currently on the legislature’s table.
Is there a chance that America would also welcome the idea? It might be a reality in the future when there is already an established sense of urgency. The right time may come gradually as more and more states are working on the digital banknote project. As of the moment, it appears that the federal government is focused on economic recovery.
The Story of Europe
Europe is not likely to stay behind in terms of the trend toward a digital monetary system. The European Central Bank has already initiated the digital euro project following China’s trial test of the digital Yuan. It would take at least five years before Europe could be able to finally realise the output of the project. A design is expected to be launched in two years, followed by three years of working on a roll-out scheme. Developing a digital banknote is one thing, and it is another thing to implement the new monetary unit.
Whether this will mean the obsolescence of cash, it is worth noting that the ECB intends to place a ceiling on the ownership of digital euros. This would help the Central Bank stay in control of digital notes in circulation. Besides, it does not intend to replace cash in the monetary system. It is designed to be used as an alternative to cash so that they would complement each other in the long run.
The Bank of England is also in talks about developing a digital banknote. It has been hosting technology forums that would help the institution weigh its options when it comes to developing its digital money equivalent. A discussion paper has been published, but there is no concrete decision yet on the matter. At least it is good to know that the United Kingdom is not closing its doors at the moment.
Amid all this, the private sector in England came up with the Digital Pound Foundation. It has been engaging stakeholders in the electronic payment sector that includes cryptocurrency developers to participate in its programs and activities. This initiative was similar to the Digital Dollar Foundation in the United States.
These are only a few of the clashes between the cryptocurrency system and the mainstream monetary system. Somewhere along the way, it would be inevitable for the two worlds to collide. Both of them could share technological innovation for an effective and efficient platform in the future; that’s why we should always do our own research to understand the cryptocurrency system.