Why Cryptocurrency is the next big thing in Digital Currency Space?

One of the hot topics these days is cryptocurrencies. That is all because of Elon Musk manipulating the market by his tweets and China banning cryptocurrencies.

One of the common opinions that every tech enthusiast believes is that cryptocurrency or digital currency is going to be the next big thing in terms of online transactions for goods and services.

Even the giant players, that is, the Central Banks from different countries are excited to look into the potential growth of cryptocurrency and other digital currencies. That is why the Central Banks are supporting the studies related to digital currencies. Here are the studies started by some nations that are aimed to look into the feasibility of digital currencies.

The South Africa Reserve Bank Announces Study Related to CBDC Feasibility

It seems like the South African Reserve Bank is understanding the importance of digital currency along with their fiat currency and are one of the first movers to make their own digital currency.

The South African Reserve Bank has started a study that aims to study the feasibility of a central bank digital currency (CBDC).

The study is expected to be completed in 2022. So we are still looking for over a year for this whole study to turn out.

South African Reserve Bank (SARB) has not decided on any retail CBDC as of now but if the results of this study come out positive, then we can see some digital currencies in the next 1 or 2 years.

The study is going to help SARB analyze how well a CBDC will fit in the banking’s policies and mandate. Also, the study aims to issue a digital currency that can be used by the general public in South Africa for the retail of various goods and services.

What is CBDC?

CBDC stands for Central Bank Digital Currency. A currency that is approved by the central bank but instead of presenting in physical form it is present in digital form. It’s like having Rs.100 note but not in paper form but digitally on your phone just like cryptocurrencies.

In other words, we can say that CBDC is just like a cryptocurrency but with authorization from the central bank. The whole aim of a CBDC is to bring out the best of both worlds, that is, cash and electronic payments.

Digital currency will help any country in reducing the cost of printing and handling cash and thus shift to a cashless society, Thus, there’s a need for the introduction of a CBDC and cryptocurrency as well as it will not only empower the citizens but will also enable them in expanding the digital economy, putting an end to the current banking system.

China Testing its Own Digital Currency too

After causing a lot of chaos in the market by banning cryptocurrency, China is now testing a digital currency of its own. It seems like China is having a lot of positive research from the initial testing phase and trying to follow what Bitcoin and Ethereum and other cryptocurrency has done in the financial structure. Their digital currency will work similarly to Bitcoin and Ethereum and will be based on the blockchain too. The research is fast-paced and we might soon see an official digital currency of China named digital Yuan.

The Bottom line

As we evolve with technology in the coming time, cryptocurrency, digital currencies and CBDC seem to be the most feasible and viable options for transactions. There are many reasons why the CBDC or cryptocurrency is going to be a big thing in the coming future. Firstly, it is very safe as it works on Blockchain. Secondly, it is decentralized so it can’t be manipulated by banks. Thirdly it can be sent across the borders with comparatively less fees as compared to banks and also it will reduce the influence of Dollars or particularly US economy influence all over the world. With so many advantages, cryptocurrency is surely going to be the currency of the future.

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