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For anyone still unsure whether a digital currency (cryptocurrency or CBDCs) will be the future. Here are the reasons why it will be the future and will surpass traditional currency :
One thing that any kind of currency needs is accessibility which physical currency does have with ATMS seemly around every corner and with the mass adaption of tap and go cards. However, with digital currency, you would be able to purchase any item from any store using just a card.
In 2020, there are big trust issues between big banks, the government and people as the public has not approved of the way they have handled their money over the past few months. There is a possibility of a recession next year, and a big reason for that was the US government's handling of the Covid-19 situation.
Digital currency, whether it is CBDCs or cryptocurrency, will use a blockchain as a base which tracks and logs all transactions done on it. This means that things like fraud will be reduced to almost zero. This has been a big selling point for cryptocurrency in the past and will help sell the idea of CBDCs going forward.
Cryptocurrency and specifically Bitcoin is inflation proof due to its finite supply which gives it a huge advantage to traditional currency. Many people are using Bitcoin as a store of value in case the recession does hit in 2021. At the same time, they are interested in a new digital currency.
5. Ease of use
Using cryptocurrency or CBDCs to pay for items would be as easy as tapping your card on a machine which is something most people are used to doing these days. It will also make the lives of retail workers much more comfortable as they will not need to fumble for change or worry about receiving the right amount of money.
Right now, it is rare to find a store or venue that does not accept card payments which, although rare, can cause some inconvenience. If we switched to a completely digital economy, then this worry would be a thing of the past.
Are there risks to a completely digital economy?
Yes, as with anything in the world, there are inherent risks. There are also risks to current physical currency, and one could argue there are fewer risks when it comes to digital currency. One risk factor that traditional currency has is damage as you can rip a note, and then it becomes worthless. This can never happen with digital currency.
No matter which currency becomes the norm, it is clear that a digital currency is on the way and will take the place of traditional currency within the next few years.
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