Digital currencies are nothing new, we all use debit cards and payment apps to purchase goods and services. The industry has skyrocketed in the past in particular with digital payment apps and cryptocurrency.
The most famous cryptocurrency– Bitcoin, was invented in 2009 and was the first ever currency not issued by a government or sovereign. The use case of Bitcoin has grown exponentially over the past decade. It can be used to pay for goods and services in a multitude of industries, from travel to even online gaming.
In one particular industry – online gambling, it’s become convenient and fast to make deposits, especially if the user is playing offshore. For example, a New Zealander who holds NZ Dollars, can easily play on European platforms quickly by depositing Bitcoin or Ethereum, with super low fees.
To help Kiwi players, comparison sites put all the safe betting sites in one place. One current trend that’s gaining in popularity is live dealer casinos. New Zealand players are able to play in the comfort of their own homes, and comparison platforms search for the best welcome bonuses. In addition, players are able to read reviews and compare payment options so they are able to opt for an online casino that meets their needs.
Convenience is the main factor in the popularity of digital currencies, as well as accessibility. Because of this, more and more central banks around the world are interested in technology.
The Peoples Bank of China is the most advanced when exploring the use of central bank digital currencies (CBDCs). Already, with WeChat pay, and Alipay, the Chinese people are used to paying for everything digitally, over mobile phones, thus the CCP views CBDCs as the next step.
It may take a while, but plans are already underway for the Chinese digital RMB. Coupled with a social credit score system it gives the Chinese government total control over its citizens, which has raised concerns in the Western world.
Nonetheless, for the CCP it’s not just about controlling its citizens, it’s also about unshackling itself from the global Dollar hegemony. A digital currency will make trade with other nations far easier and more convenient, which will ultimately lead to less reliance on the USA.
Most countries are on board with digital currencies but are not proponents of cryptocurrencies like Bitcoin. India for example has deepened its strong stance against cryptocurrencies because it’s a huge threat to macroeconomic stability.
As cryptocurrencies are outside the purview of government or financial institutions, authorities have taken measures globally to curb their adoption. In China, all cryptocurrency is banned and other authoritarian regimes such as Iran and Russia seem to be following in the CCPs footsteps.
There are many pros and cons of Bitcoin, with the biggest pro being that an individual is able to send money to another fast and cheaply, without 3rd party interference. On the other hand, the major con of Bitcoin is that it’s often used for illicit activities. Many commentators also are concerned about the amount of electricity the Bitcoin network consumes, which makes it not environmentally friendly.
In the Western world, digital payments are as popular as ever, with Apple Pay and Google Pay gaining substantial ground in recent years. The convenience of paying for goods and services on a phone is a major selling point as well as being able to budget much better than with cash.
In addition to digital payment services, there are plenty of FinTech solutions to assist with banking. Options such as Revolut are increasingly popular in Europe as people are able to send money to one another using their phone numbers. The speed and the cost are far better than that of traditional banks, and you are even able to order a card to withdraw physical cash.
These FinTech solutions soared during the pandemic, and continue to grow across the Western world. One thing is for sure, digital payments are here to stay, and cash is certainly under attack.
Some nations like Sweden have already envisioned a cashless society by 2030, as going digital will help with taxes and the distribution of welfare. However, government digital payments will go hand in hand with cryptocurrencies because of privacy concerns.