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Last month, the United States propose A Bitcoin Federal Reserve. Recently, the Sovereign Heritage Fund for Mubadala Water invested $ 436 million in Bitcoin (BTC) and connections with the most dominant cryptocurrency in the world are also find in the Norway government pension fund and a Singaporean sovereign wealth fund, Temasek. It is extremely clear that Bitcoin is gaining rapidly worldwide, and the global adoption of cryptocurrency is also increasing, in particular in Asia, India, Indonesia and Nigeria be The three main countries leading to the adoption of cryptography in 2024.
Bitcoin, stablecoins and other decentralized currencies represent a rejection of the traditional financial system. One that is in the grip of slow transaction times, high transaction costs and swollen indigenous currencies; These challenges are not new and have highlighted the need and early success of decentralized finance. But what we are at the edge of the end is a mass shortage of traditional currencies (Fiat). Central banks will soon no longer have monopolistic control of their native currency, and the Stablecoin wars will become the new wars of currency.
“At CBDC or not at CBDC?”
The digital currency debate has reached a turning point. For years, governments have questioned: “at CBDC or not at CBDC?” In January, the United States voted. With the executive order of Trump prohibition The development of a digital currency of the American central bank and by pushing the Stablecoins instead, the United States has clearly indicated that it will not pursue digital money controlled by the government. But while the decision solidifies the stablescoins as a favorite path of the United States, the overall history of Stablecoin is far from simple.
The reality is that the United States has never needed a digital dollar. There is no objective advantage for a CBDC when the US dollar already dominates global finance. Governments and markets around the world are counting on the dollar to stabilize payments, facilitate cross -border transactions and access wealth. Stablescoins supported by the USD such as Tether (USDT) and USD Coin (USDC) have already accomplished what a digital currency issued by the government was supposed to do. They provide companies and individuals with a way without friction to store value, to transact internationally and to bed against low local currencies – all without requiring centralized authority.
While the United States has rejected a CBDC, other nations are still attacking its digital currency strategies. Many see digital currencies as a means of modernizing their financial systems, either by improving their Fiat for the digital age, or by explaining the advantages of financial inclusion, security and transparency. But digitization alone is not a solution. The CBDCs offer governments unprecedented control over financial activity, undergoing the very culture of financial freedom that blockchain technology has been built to protect. Worse, they do not guarantee stability. In countries where the inflation and devaluation of money are endemic, a CBDC does not solve the problem – it simply digitizes a broken system.
Back to people
People take matters into their own hands; The decentralized nature of blockchain means that consumers have financial alternatives out of the reach of their country. And when governments restrict digital assets, black markets emerge. While countries impose capital controls, citizens seek to get around them using stabbed. And when central banks swell their national currencies thanks to an imprudent monetary policy, people are starting to replace their fiduciary currency with the decentralized blockchain without friction, without friction. It would only take 1%, 5% or 10% of the population of a country to move their savings in digital assets such as Bitcoin or Stablecoins supported by the USD before their local currency begins to destabilize. As this number increases during the next decade with the adoption of blockchain, monetary sovereignty can be lost.
This change shows a path to the end of the monopoly of central money banks. For centuries, governments have dictated the currency used by their citizens. This is no longer the case. If central banks do not adopt a more competitive approach – in particular with regard to inflation, public spending and taxation – their citizens will simply migrate to more stable alternatives and will be able to do so very quickly using peer -to -peer transactions based on blockchain. People are no longer linked to national borders when they choose where to store their wealth. They can opt for digital dollars, bypassing geopolitical constraints such as currency controls, the economic influence of the BRICS, even changes in the petrodollar system.
These are the first stages of massive monetary consolidation. Today, there are 180 fiduciary currencies, but history tells us that the adoption of technology occurs in the waves. We are already several years old in the blockchain revolution. This can take five, ten or twenty years, but ultimately, most of the weak currencies will disappear. If central banks do not stop their printing, the vast majority of fiduciary currencies in the world will merge, will consolidate, either to remain competitive in a digital economy. Those who will not just surge in non-record.
And yes, while the United States should earn the most, the dollar being the main pair of trading fiat and the overwhelming majority of the stablecoins fixed to the USD, the imminent massive extinction of global fiatal currencies signal a significant warning to central banks that hesitate to adapt.
Survival of central banks
Central banks will have to adopt competition on the free market if they want to remain relevant. The alternative must be left by a financial system which already evolves without them.
For central banks, adoption resembles collaboration with innovative and decentralized Fintechs which include the needs of the new era of global finance. He also seems to kiss cryptocurrencies like Bitcoin. And fundamentally, it seems that the implementation of stronger and faster compliance measures to meet the demand for faster transactions to and from citizens and world communities.
In the long term, even stablecoins may not be the final destination. While the adoption of Bitcoin increases and the mining reaches full maturity, its volatility will decrease. In a century, Bitcoin or another finished digital asset could become more stable than today’s stablecoins. Without inflation, no centralized control and a fixed diet, Bitcoin could emerge as the dominant global currency. Including these principles and their perspectives, governments must add bitcoin and other digital assets to their strategic reserves. But those waiting for this point will lose their competitive advantage and pay the price.
The coming months will test how governments and world markets react. Are we going to see a wheelbarrow for the supremacy of digital currency, the countries that ran to issue their own stablecoin alternatives? Or will history repeat itself, with weaker currencies collapse while the strongest consolidate power? One thing is certain: the Stablecoin wars began, and there is no going back. The world is on the verge of a financial revolution, and only those who adapt will survive.
