Cryptocurrencies might not take over the world tomorrow, or even this year, but they will eventually be a pretty big deal. That’s the judgement of the Federal Reserve Bank of New York in an article they put out February 11.
Their piece, titled “The U.S. Dollar’s Global Roles: Where Do Things Stand?”, looks at the current status of the U.S. dollar, what will happen if it loses its dominance, and a status check of the current alternatives.
With regards to cryptocurrencies, they said:
“Cryptocurrencies, set up to challenge the conventional structure of payments in official currencies, thus far are unlikely to meet criteria for international roles in the near to medium term. Widespread use of online retail platforms has not yet challenged dollar roles.”
Their research goes on to conclude that the U.S. dollar remains fairly healthy as the world’s global currency, despite some diversification from businesses and global governments to protect against a potential decline. Specifically, the dollar is the reserve currency of 63% of foreign exchanges.
That marks a decrease however from 2014, and is a considerable decrease from where it was at 20 years ago. The overall message of the article can be summed up as this: The U.S. dollar remains strong, but threats to its dominance are slowly starting to emerge, and cryptocurrency gets a special shout out for that.
Their judgement that cryptocurrency may not topple fiat any time soon could be correct. As they note, payment systems currently handle $5 trillion in transactions daily, and cryptocurrency just isn’t up to that task yet.
One crypto that is working towards that challenge is Bitcoin SV (BSV). As the only digital currency that is being built to massively scale on chain, there’s no limit to what BSV will eventually be capable of. It’s already proven it can handle 103MB blocks, and there is unlimited growth beyond that.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.