It is funny to think how far we have come financially in just a few decades, as only 50 years ago we were still using pounds which were divided up into 20 shillings. Now we use the Australian dollar, which is much more streamlined and convenient.
We, as humans, evolve with the times and develop new ways to do everyday tasks that make them more reliable and less time-consuming. The evolution of our money is an excellent example. We have gone from furiously looking for that $1 we thought we had in our pocket. To merely tapping a card on a machine.
Right now, tap-and-go debit cards are the preferred way of payment as you do not need to carry around any physical money. It also reduces germ transfers which in today's COVID times is a great benefit. It is also almost instant. You do not need to wait for the cashier to give you the correct change or watch as someone takes 5 minutes to find the right amount of money.
What is next for our currency?
Right now, there are 2 options where our next financial evolution could go, and those are different types of cryptocurrency and central bank digital currencies,
Both of these have similar characteristics such as:
The key difference is who controls them, as cryptocurrencies are decentralised and therefore have no overruling business or figurehead. While CBDCs will be linked to the large banks and be controlled by them just like how they control the current legal tender.
Many people have been waiting for a digital currency for a while now. The idea of cryptocurrency has become much more appealing recently as the US dollar is becoming distrusted. This is due to the recent election and a possible recession. People want a currency that is not affected by these outside sources.
The government is not as opposed to cryptocurrency as one would think, especially considering its anonymous nature. Thanks to the blockchain technology it uses. However, despite this, Australia declared it was legal in 2017. It is classified as an asset and is taxed because of it, which just gives them more money, so it is kind of a win-win situation.
Could cryptocurrency and CBDCs coexist?
Cryptocurrency could very well be used as an alternative, and we already have proven cases of this working. The company Overstock accepts both money and Bitcoin as well as Microsoft who accept Bitcoin on their online Xbox store. We will also see Visa bring out a crypto debit card in the US next year, so it is a genuine possibility.
The main concern about cryptocurrency that people have is its volatile nature, but recently Bitcoin has been very consistent and has in fact been rising and is now worth $19,430 AUD as of writing.
If you want to keep up to date with Bitcoin or any other cryptocurrency price, click here and use our crypto tracker.