Pismo has launched its latest in-depth whitepaper, exploring the future of cryptocurrency, CBDCs, and stablecoins.
Cryptocurrency has gone from a proof-of-concept that programmers tinkered with to a global phenomenon. It has changed how people think about finance, business, and the economy.
It’s not just the currency, either. More than two-thirds of financial institutions are either already running systems on blockchain technology or planning on deploying it soon. 83% of people in leadership positions at banks believe blockchain and cryptocurrency are set to impact the sector.
Blockchain and cryptocurrency will play a major role in the development of the financial services sector in the near future. But what would a world powered 100% by cryptocurrency or CBDCs, look like? What would the consequences be for financial institutions?
The new paper from Pismo seeks to investigate the potential impact of cryptocurrency on the financial system. It imagines three separate scenarios in which banks must react and how they could do so:
- A world in which cryptocurrency has become a mainstream method of payment
- An interconnected world underpinned by total CBDC deployment
- Significant entry by Big Techs into financial services using private stablecoins
How would total cryptocurrency adoption affect the banking industry as we know it today? Far from bringing the whole ecosystem down, there are many ways financial institutions could react to this rapid change and maintain their position in the market.
At the time of writing, just a handful of countries (Nigeria and the Eastern Caribbean States) have launched an official CBDC, while 18 are in the pilot phase. Yet conjure a world in which every nation has developed, deployed, and supported its digital currency. What would that look like?
Large non-bank commercial companies entering the financial services sector have caused plenty of disruption in the past few years. Yet the Big Tech giants deploy a business model almost entirely reliant on data and direct interaction. A monopoly is created and grown as they funnel their users into a feedback loop encompassing a range of “essential” products and services. What if Big Tech firms succeeded in creating stablecoins, backed by the dollar, and created closed-loop ecosystems for their customers? How might the financial system react or adapt?
Pismo’s new paper analyses these scenarios and provides thought-provoking answers to these questions. The report also features expert insight from a variety of industry sources, including:
- Alberto Asquer, Lecturer in Public Policy and Management, SOAS University of London
- Thomas Bohner, Founder and CEO, Credix
- Philip Benton, Senior Analyst for Financial Services, Omdia
Want to discover the future of cryptocurrency? Click here to download the paper and read it today.