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Crypto Will Eventually Replace Fiat but How Soon and Where?

Crypto Will Eventually Replace Fiat, but How Soon and Where?

ANALYSIS

A recently unveiled Deutsche Bank “Imagine 2030” report boldly puts a date on the eventual fiat–crypto “social consensus flip,” citing the Asian continent and, in particular, China, to have already recognized the trend. If true, then what every cryptocurrency speculator and investor would like to know is, when will it happen? The current landscape is a predictor of the future.

Analysts talk of the social consensus flip

The classification of crypto by Deutsche Bank includes central bank digital currencies, or CBDCs, which is worth keeping in mind while results are discussed. Certainly, the analysts behind the research hold a more positive belief that these moves toward centralized cryptocurrency solutions will replace fiat currencies.

The report concludes that the next step to avoid falling behind in the world’s economy will be a result of the fiat–crypto flip. The concept, while interesting, still comes with its flaws, such as the fact that global adoption, government acceptance, and massive leaps and bounds in cybersecurity technology would need to occur in order to even consider replacing traditional fiat with centralized (or decentralized) crypto assets.

If a CBDC currency from a major country turns out to be successful and the centralization strategy is implemented by other countries, most of these investors and traders will likely begin to look in its direction. All this movement is likely to drastically affect the blockchain industry, but may not necessarily drive mass adoption in the direction of decentralized currencies.
 

China, the frontrunner?

On the heels of Chinese President Xi Jinping’s announcement regarding the government’s interest in blockchain tech, the country has made clear its strong efforts to implement feasible plans that ensure individuals and businesses can make national and international transactions using this fast-growing technology.

However, the idea is not to trigger Chinese crypto enthusiasts to invest more in Bitcoin and any other decentralized currencies with an immutable ledger, but rather to mirror a more centralized focus in the direction of the People’s Bank of China, or PBoC, which plans to launch the world’s first national cryptocurrency.

The plan has been in motion for some years, and the PBoC has completed the prototype according to local officials. With the government’s support over the years, the pace of development can increase, scaling the creation and testing of this national currency to become a part of the closed Chinese system.

Gantig Bayarmagnai, CEO of Bitmonex LLC — a digital asset exchange based in Mongolia — discussed the future of the Chinese yuan and prospects of the social consensus flip with Cointelegraph:

“With the Chinese government taking the initiative by introducing their crypto Yuan early next year, we will most likely see other countries following suit. Countries like China, South Korea, and Japan will most likely see a quick transition to a crypto-based payment system because of their existing infrastructures and developed culture in accepting digital payments as the norm, as opposed to using cash for payments. It also gives the government full autonomy in monitoring all transactions with ease.”

Although clampdowns may loom from centralized currencies, the number of potential financial transactions that can be carried out through transitioning the Chinese economy to the blockchain is strong, with over 775 million employed persons in the country. But why exactly does the government want to create a centralized technology?

Aamir Sohail, director of Blockchain Smart Solutions — an international Distributed Ledger Consultancy — discussed the future of CBDC with Cointelegraph:

“Central bank tokens have a potential for mass adoption if done right. Driving a right balance between decentralization and inflationary measures is pivotal for central banks. These stable cryptocurrencies and central bank tokens may exist with fiat by 2030 but I do not think these will completely replace fiat but may coexist.

Rather than allowing the natural progression of decentralized currencies, centralized currencies on the blockchain are being touted as acceptable options for mass adoption. It is a small step, but carries significant risk.

The warning signs for the future of these pseudo cryptocurrencies is present though, since the PBoC deputy director, Mu Changchun, made the statement at the China Finance 40 forum. He indicated that the new national currency to be launched would be operated in a two-tier system, with the PBoC on top, and commercial banks allowed in the second tier of the centralized system. This allows for full power of currency manipulation between banks, with the government overseeing it all.
 

Related: US and China Battle for Blockchain Dominance

During a conversation with Cointelegraph, Miko Matsumura, the co-founder of Evercoin, highlighted that given the power the People’s Bank of China seems to have, the report estimate is accurate. He further believes that the same phenomenon may occur in half of all countries by 2025. He went on to add:

“Only the top 20 national or regional (e.g., Euro) currencies will survive. As far as internet currencies the Pareto principle will enable the dominant currency to take 80 percent of the internet market. Bitcoin will be the dominant value store but not the dominant Internet currency protocol. It’s not clear who wins [between centralized and decentralized currencies].”

Currently, the Chinese government can monitor all transactions and assets of individuals, similar to what their CBDC would be capable of. This is still very unlike what happens in a decentralized system, where everything that happens in the public ledger, like transactions, can remain anonymous.

Some point to Facebook’s Libra as the reason behind the increasing pace of China’s blockchain development. Libra itself is centralized through the wallet function, and as Mark Zuckerberg knows, the value is in Know Your Customer data.

Related: China’s CBDC Showcases Interoperability as Centralization’s Weakness

The Chinese government likely sees the value of knowing and controlling valuable transaction data that can now include the flow of finances for the general population. Regarding this, entrepreneur and managing partner at Morgan Creek Capital, Anthony Pompliano, exclusively told Cointelegraph:

“The choice currency of drug dealers, money launderers, and terrorists is still cash.”

With all of this in mind, how crypto is classified will need to be more defined as more CBDCs enter the picture because they are (from a decentralized viewpoint) still fiat and centralized, just on the blockchain.
 

Assuming the 2030 date, decentralized mass adoption will lag

So, theoretically, what would need to happen for the Chinese CBDC to take over as the national fiat and eliminate the necessity for the original yuan to exist?

In short, the government would have to rid their nation of the yuan, giving citizens access to the resources needed to utilize the new digital currency. Thus, by eventually onboarding their citizens, the blockchain would gain billions of users. So, assuming Deutsche Bank is correct in projecting this to happen by 2030, the transition merely adds a pool of blockchain users which are one step closer to adopting decentralized currencies.

In analyzing the potential for CBDC, the question arises, Will centralized parties allow users to offboard and invest in decentralized currencies? By allowing fiat onboarding to centralized CBDC, an entirely new market of blockchain users will emerge. So, if the Deutsche Bank prediction is accurate, adoption toward true decentralized currency may still take time beyond 2030, as CBDCs still have fiat protections where decentralized currencies do not.

In a Cointelegraph exclusive discussion with fintech venture studio Draper Goren Holm’s founding partner, Alon Goren, he discussed the Deutsche Bank report’s prediction:

“Since central bank coins are counted in [the Deutsche Bank 2020] prediction, then I totally agree [on the eventual fiat–crypto social consensus flip]. Just as large financial institutions are experimenting with digitizing securities and creating their own tokens and coins, I think progressive governments will start doing that more and more. It’s a natural progression for everything to be digitized and I think that the cat is now out of the bag and they will have to create their own tokens to (try and) retain control of financial systems.”

Therefore, as blockchain users are onboarded to centralized currencies they become one step closer to decentralized currencies, but still not directly involved. By reducing barriers to access the entire capital market (including centralized currencies), a system may emerge where instead of trading into different centralized currencies, users will begin to utilize more decentralized currencies.

In a situation like this, a currency swap between centralized currencies that can also provide access to the decentralized currency ecosystem on the blockchain will add the most value. Enterprise solutions like XRP or consumer solutions like Element Zero Network serve as the middle ground between currencies at little cost without spreads, unlike the current forex trading model.

Maintaining the value between the two currency systems — centralized and decentralized — is important in ensuring success of users transitioning from fiat (or centralized currencies). Technologies that follow fair and free decentralized access to blockchain fiat currencies and decentralized currencies will add the greatest value to achieving mass adoption past the 2030 Deutsche Bank prediction.

On the matter, Cointelegraph spoke to Michael Creadon, the head of institutional sales at DrawBridge Lending. Creadon believes that, “Decentralization is a noble goal but it has its limits.” He went on to clarify that if one wants to engage with Bitcoin in the United States, they would have to deal with multiple governmental agencies and watchdogs. He continued:

“This is not a good thing or bad thing. It’s reality. You can see the pendulum swinging back away from decentralization towards centralization at a blinding speed. Look at Libra; how’s decentralization working for them? But like anything, the answer is probably closer to the middle.”

Apart from this, the CBDC is not intended to be a quiet coin, as PBoC’s director asserted; it is such that in years to come, this centralized cryptocurrency can fullysubstitute fiat.

PBoC never at any point mentioned that it would ban other cryptocurrencies from functioning in the country once its new currency is launched. This is a positive sign if a decentralized future is resting on the progression of fiat to centralized currency and then onto a decentralized currency. Centralized currencies will exist, but decentralized ones will hopefully not be banned, leaving the choice to the people.

 

By Kyle White

Bitcoin amp Crypto Market Bleeding: BNB BCH LTC EOS Analysis

Bitcoin & Crypto Market Bleeding: BNB, BCH, LTC, EOS Analysis

  • The total crypto market cap is declining and struggling to stay above the $188.0B support.

  • Bitcoin price is down more than 2% and it broke the $7,200 support area.

  • Litecoin (LTC) price is declining and approaching the $43.20 support area.

  • BCH price is somehow holding the main $200 support area.

  • EOS price is sliding and it seems like it could soon test the $2.500 support area.

  • Binance coin (BNB) is now well below the $15.00 level and it might struggle to stay above $14.20.

Bitcoin (BTC) and the crypto market cap declining steadily. Many altcoins such as Ethereum (ETH), binance coin (BNB), ripple, litecoin, BCH, EOS, TRX, and ADA are under a lot of pressure.

Bitcoin Cash Price Analysis

In the past few sessions, bitcoin cash price mostly traded in a range below the $220 and $225 resistance levels against the US Dollar. More importantly, BCH price somehow holding the main $200 support area. If there is a downside break below the $200 support, there is a risk of a drop towards the $185 level.

On the upside, an initial resistance is near the $215 level. However, the main hurdles are still near the $220 and $225 levels.

Binance Coin (BNB), Litecoin (LTC) and EOS Price Analysis

Binance coin (BNB) price declined recently and settled below the $15.00 support area. BNB price even spiked below the $14.50 support and it is now consolidating losses. On the upside, there are resistances near the $14.80 and $15.00 levels. On the downside, the main support is near the $14.20 level.

Litecoin price is declining and it recently settled below the $45.00 and $44.50 support levels. LTC price is now approaching the $43.20 support. If it fails to stay above the $43.20 support, the bears are likely to aim the $41.00 support area in the near term.

EOS price is failed to stay above the $2.600 support area and it is sliding toward the $2.500 area. If the price continues to decline, the bears are likely to lead the price towards the $2.350 level. On the upside, the $2.600 and $2.650 levels are now likely to act as hurdles.

Crypto Market Cap

Looking at the total cryptocurrency market cap hourly chart, there was a steady decline below the $195.0B support area. The crypto market cap test the $188.0B support and it seems like it is struggling to hold the ground.

Therefore, a downside break below the $188.0B support area is likely to spark another slide in bitcoin, Ethereum, EOS, litecoin, ripple, ADA, BCH, XLM, BNB, TRX, XMR, and other altcoins in the near term.

 

Aayush Jindal

Crypto Market Cap And Bitcoin Facing Hurdles – BCH BNB EOS TRX Analysis

Crypto Market Cap And Bitcoin Facing Hurdles – BCH, BNB, EOS, TRX Analysis

  • The total crypto market cap is struggling to surpass the $200.0B resistance area.

  • Bitcoin price is also facing a lot of hurdles near the $7,400 and $7,440 levels.

  • EOS price is holding the $2.500 support, but it is struggling to clear the $2.850 resistance.

  • Binance Coin (BNB) is currently consolidating above the main $15.00 support.

  • BCH price is currently above the $205 support and attempting a break above the $215 resistance.

  • Tron (TRX) price seems to be trading in a range above the $0.0150 support area.

The crypto market cap and bitcoin (BTC) are struggling to gain bullish momentums. Ethereum (ETH), binance coin (BNB), ripple, BCH, tron (TRX), litecoin and EOS are facing hurdles.

 

Bitcoin Cash Price Analysis

After a short term downside reaction, bitcoin cash price found support near the $205 level against the US Dollar. The BCH/USD pair is currently trading in a range above the $205 support area and it is facing a strong resistance near the $215 level.

The next key resistance is near the $225 level, above which there are chances of a decent rise towards the $240 level. On the downside, a close below $200 might start a fresh decrease.

 

Binance Coin (BNB), EOS, Tron (TRX) Price Analysis

EOS price managed to settle above the $2.500 and $2.600 support levels. However, the price is finding it hard to clear the main $2.850 resistance area. If it succeeds, the next stop for the bulls could be $3.000. On the downside, only a close below $2.500 might put the bulls under pressure.

Tron price is currently consolidating above the key $0.0150 support area. On the upside, TRX price is facing resistance near the $0.0158 and $0.0160 levels. A successful close above the $0.0160 resistance is likely to lead the price towards the $0.0165 and $0.0167 levels.

Binance coin (BNB) remained confined in a range above the $14.50 and $15.00 support levels. On the upside, there is a solid resistance forming near the $16.00 area. Once BNB price settles above the $16.00 resistance, it could gain bullish momentum in the near term.

Crypto Market Cap

Looking at the total cryptocurrency market cap 4-hours chart, there was a bearish reaction from the $208.0B resistance area. The crypto market cap declined below the $200.0B support and tested the $188.0B zone. It is currently correcting higher, but facing resistance near the $200.0B area.

To start a fresh increase in bitcoin, Ethereum, TRX, LTC, EOS, ripple, ADA, XLM, WTC, BCH, and ICX, the market cap must surpass the $200.0B and $208.0B resistance levels. If not, it could decline further towards $182.0B and $175.0B.

 

Aayush Jindal

Bitcoin Cash ABC Litecoin and Ripple Daily Analysis 301119

Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 30/11/19

It’s a mixed start to the day, with Bitcoin Cash ABC bucking the trend. Failure to move through to key levels could see the majors hit reverse, however.

Bitcoin Cash – ABC – Bucks the Trend Early

Bitcoin Cash ABC rose by 1.49% on Friday. Partially reversing a 2.28% decline from Thursday, Bitcoin Cash ABC ended the day at $223.43.

A bullish start to the day saw Bitcoin Cash ABC rise from an early morning intraday low $220.16 to a mid-morning high $225.60.

Steering clear of the major support levels, Bitcoin Cash ABC broke through the first major resistance level at $220.79.

Coming up against the second major resistance level at $225.17, Bitcoin Cash ABC fell back to $221 levels before an afternoon recovery.

In the recovery, Bitcoin Cash ABC rallied to a mid-afternoon intraday high $226.44.

Bitcoin Cash ABC broke back through the second major resistance level at$225.17 before easing back to $223 levels.

At the time of writing, Bitcoin Cash ABC was up by 0.34% to $224.19. Bitcoin Cash ABC rose from an end of Sunday $223.43 to an early morning high $224.19.

The major support and resistance levels were left untested early on.

For the day ahead, Bitcoin Cash ABC would need to steer clear of sub-$224 levels to support a run at the first major resistance level at $226.53.

Bitcoin Cash ABC would need the support of the broader market, however, to break back through to $225 levels.

Barring a broad-based crypto rally, Friday’s high $226.44 and first major resistance level would likely limit any upside.

Failure to steer clear of sub-$224 levels could see Bitcoin Cash ABC see red for a 2nd time this week.

A fall through to $223.30 levels would bring the first major support level at $220.25 into play.

Barring a crypto meltdown, however, Bitcoin Cash ABC should steer clear of sub-$220 levels on the day.

Litecoin Struggles at $48

Litecoin rallied by 3.88% on Friday. Reversing a 1.86% fall from Thursday, Litecoin ended the day at $48.68.

A bullish start to the day saw Litecoin rally from an early morning intraday low $46.84 to an early afternoon intraday high $49.36.

Steering clear of the major support levels, Litecoin broke through the first major resistance level at $47.93 and second major resistance level at $48.96.

Through the late afternoon, Litecoin slipped back to $48 levels before an early evening return to $49.3 levels.

Resistance at $49 weighed, however, with Litecoin sliding back through the second major resistance level at $48.96.

At the time of writing, Litecoin was down by 0.82% to $48.28. A mixed start to the day saw Litecoin rise to an early morning high $48.83 before falling to a low $47.93.

Litecoin left the major support and resistance levels untested early on.

For the day ahead, a move through to $49 levels would bring the first major resistance level at $49.75 into play.

Litecoin would need the support of the broader market, however, to break out from Friday’s high $49.36.

Barring a broad-based crypto rally on the day, resistance at $49 would likely limit any upside on the day.

In the event of a market rebound, Litecoin could visit $50 levels for the 1st time since 22nd November…

Failure to move through to $49 levels could see Litecoin slide deeper into the red.

A fall through the morning low $47.93 would bring the first major support level at $47.23 into play.

Barring an extended sell-off, however, Litecoin should steer clear of sub-$47 support levels on the day.

Ripple’s XRP Holds onto $23

Ripple’s XRP rallied by 3.23% on Friday. Reversing a 0.43% fall from Thursday, Ripple’s XRP ended the day at $0.23150.

A bullish start to the day saw Ripple’s XRP rally from an early intraday low $0.22365 to a mid-afternoon intraday high $0.23400.

Steering clear of the major support levels, Ripple’s XRP broke through the first major resistance level at $0.2286. Coming up against the second major resistance level at $0.2332, Ripple’s XRP fell back to sub-$0.23 levels in the late afternoon.

Late in the day, Ripple’s XRP found support to close out the day at $0.23 levels.

At the time of writing, Ripple’s XRP was down by 0.54% to $0.23026. A bullish start to the day saw Ripple’s XRP rise to an early morning high $0.23349 before sliding to a low $0.23022.

Ripple’s XRP left the major support and resistance levels untested early on

For the day ahead, a hold onto $0.23 levels would support a run at the first major resistance level at $0.2358.

Ripple’s XRP would need the support of the broader market, however, to break out from the morning high $0.23349.

Barring a broad-based crypto rally, Friday’s high $0.2340 and first major resistance level at $0.2358 would likely limit any upside.

Failure to hold onto $0.23 levels would bring the first major support level at $0.2254 into play before any recovery.

Barring an extended sell-off, however, Ripple’s XRP should steer clear of the second major support level at $0.2194.

 

Bob Mason

Nov 30, 2019 05:14 AM GMT