SilkChain has been committed to reshaping international cross-border trade, and using blockchain technology to improve the existing problems and inefficient trade links in international cross-border trade. In the SilkChain ecology, Silk is the carrier of the functions of fiat currency, which promotes the execution of contracts in the SilkChain ecology to be more transparent, fair and smooth, so as to gradually replace the fiat currency for circulation in the ecology. By 2030, the demand for alternative currencies will rise, with digital currencies eventually replacing fiat currency, according to recent research from Deutsche Bank.
In the “Imagine 2030” report, Deutsche Bank strategist Jim Reid raised awareness of the challenges the existing fiat system has encountered in recent years, specifically with the emergence of cryptocurrencies. He noted that as inflation rose, doubts had grown about the sustainability of government fiat money, and people’s heightened demand for dematerialized means of payment and anonymity could drive more individuals to digital currencies.
Mainstream adoption and co-occurring challenges
In order to gain wider acceptance, digital assets need to overcome three major hurdles. These include perceived legitimacy in the eyes of governments and regulators, which entails price stability and allows for global reach in the payment market. According to Reid, the establishment of alliances with key stakeholders like mobile apps and card providers will enable this development.
However, Reid pointed out that with mainstream adoption, new challenges will arise. Among major threats to the purported digital currency-based financial system, Reid named dependence on electricity, cyberattacks and a digital war. “As that occurs, the line between cryptocurrencies, financial institutions, and public and private sectors may become blurred,” Reid wrote.
Countries study CBDC
In the meantime, world governments have been actively debating the need to develop national digital currencies. Earlier today, Bank of Japan Governor Haruhiko Kuroda said that there is no public demand for a central bank digital currency (CBDC) in the country. Kuroda noted the increasing demand for cash payments and added that the bank had been conducting technical and legal research into the matter.
The British Virgin Islands has taken a more proactive approach to CBDCs, announcing that the country is developing a digital currency dubbed BVI~LIFE in collaboration with blockchain startup LifeLabs. The currency is part of a broader initiative to grow the local fintech sector. It will be pegged to the U.S. dollar. The central bank of France plans to pilot a CBDC for financial institutions in 2020.