Three Upcoming Crypto Trends
Updated: May 23, 2022
There is worldwide interest and growing buy-in for cryptocurrency. Many financial institutions and governments are looking at part of its fundamental foundation, blockchain technology, as the potential future for attributing and securing money. However, despite the hype and investments it has been noted that cryptocurrency is still not heavily used for its primary intention – payments.
Here are three trends in cryptocurrency that could be changing that.
Still a buzz word in its infancy, the metaverse is the growing group of virtual worlds built on the new virtual reality technologies hitting the consumer market. In the metaverse, people can do many of the things they do in real life such as work, shop, set up businesses, buy land, go to concerts and so forth. These transactions and events use blockchain technology to create the places where people spend their time.
And what better way to buy clothes for a metaverse avatar or tickets for a metaverse concert than through money utilizing the same decentralized blockchain system? Even now cryptocurrencies are already acting like cash in the virtual world economy. But it goes even farther than that. Monetary rewards earned in metaverse games that use cryptocurrency can translate to actual value outside the game – acquirable as cash-in-hand at their nearest Bitcoin ATM.
Central Bank Currencies
There is a lot of talk around government-based or central bank-based digital currencies. These currencies would be a digital extension of the real-world money backed by the same big systems. While it’s still uncertain what these digital currencies would mean for the current cryptocurrency world, the progress seems steady.
Several countries have already launched their own digital currency. China announced a significant crackdown on outside cryptocurrency services in late 2021, just over a year since they piloted their own digital yuan. Similarly, the Bahamas has been operating the Sand Dollar since 2020 and Cambodia created a national blockchain payment system, called Bakong in 2021. Other countries, such as the United States, are anticipated to follow suit soon.
Regulators and policymakers are quickly gaining a deeper understanding of the digital currency space. This engagement and knowledge is allowing them to find loopholes and potential issues within the systems and ways to resolve those problems.
One of the items of concern for regulators is the proliferation of stablecoin. Stablecoin is cryptocurrency tied to real-life assets such as the US dollar. It is becoming popular as a way for investors to move digital money from one platform to another without losing value. However, most stablecoin does not have the cash reserves to support a rush on the currency. This area in particular is likely to see new regulations in order to reinforce the idea that consumers are safe to view crypto as spendable currency.
Cryptocurrencies are an exciting market with a great deal of potential. And these trends are just a few of the ways crypto is making headway as a real currency used for payments.
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