When Can Cryptocurrencies Be Used Sensibly?

Cryptocurrencies

For the average consumer, cryptocurrencies will only be of interest as investment objects, speculation, and short-term profits. Maybe also for long-term investments and the hope of getting rich with it, but there is almost no actual application anywhere. Indeed, some internet shops here and there accept cryptocurrencies, which has been accepting Bitcoin by default and successfully for several years. Still, these remain absolute exceptions at the moment.

On the one hand, this may be because cryptocurrencies do not have a very good reputation and, of course, on the other hand, to their environmental friendliness. Putting that aside, however, cryptocurrencies would be a quick, easy and, above all, flexible means of payment that could also be converted into other cryptocurrencies at any time. Assuming we have the appropriate payment providers, we could, for example, transfer € to a digital account and use it to pay anywhere in the world, whether in dollars, yen, bitcoin or ether. A dream idea that would make things much more manageable. But when can we expect cryptocurrencies to prevail?

The Use Of Technologies

For governments and large companies, cryptocurrencies currently seem a bit like a significant testing ground. It is tried out which technologies can be used, how they are secured and, above all, accepted. But a final solution doesn’t seem to be in sight at the moment. China, in particular, is currently the absolute pioneer when it comes to digital payment culture. In principle, almost everyone uses digital money here. Be it via social media app or payment provider, both are pretty common. However, a state currency is currently being prepared to regain sovereignty over payment transactions.

What works well in China is almost impossible to enforce in Europe. While in China, people pay with their face or cell phone, in Europe, we rely on banks because we refuse the technology. In the meantime, however, there are already banks with which you can do business on the crypto market, and that at least shows in which direction things can go. Unfortunately, there is no accurate Bitcoin Bank, just an app that calls itself that, but which “only” contains a trading system.

In the meantime, however, there are advances in a good direction. While the European Central Bank is in the process of exploring the limits of its cryptocurrency, China has already begun to introduce its e-yuan. However, both currencies will meet fundamentally different needs. While in China, all payment transactions are to be digitized. In Europe, at least according to the European Central Bank, the e-euro is to become more of a supplement to cash, equally usable, just as anonymous and limited in quantity. In other words, there will probably be an upper limit up to which you can own e-euro.

The meaning of this is that “small transactions” that are usually paid for with cash, such as weekly shopping, going to the swimming pool, theatre, cinema or restaurant, should be covered with the e-euro, but “large transactions” like that Buying a car, house or high-quality jewellery should be done with bank money.

The Future

A digital euro and thus the theoretical start of a digital European currency is still a long way off. The European Central Bank is conducting exploratory talks scheduled to last two years ( all information here). These talks will end in October 2023. By then, there should be a plan, wishes and suggestions as to what a European digital currency should look like, what technology it should be based on and so on.

It is essential to know at this point, however, that once this phase has ended, a decision will be made as to whether, how, and in what time frame a digital euro should come. So it will probably be a few more years before this can get off to a flying start.

By then, we will probably have been using payment systems from abroad for a long time to pay digitally faster and more securely. As always, Europe is lagging, and a European solution can be expected in 5-8 years at the earliest.

Also Read: This Is How Digital Insurance Works

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