Is there a digital currency war going on? The present and even more so the future is digital. There is no doubt about that. From your mail, medical and financial records, and sooner than later, depending on where you are, all your banking/money system will be 100% digital and currencies won’t be the exception. Digital currencies won’t be the exception.
In a sort of way, we are going through a currency war but not the one you may be thinking of (like in the 1930s or China devaluing the Yuan to stay competitive in exports and keep labor cost cheap to the outside world).
We are talking about a new age of money, an epic digital currency war, from state-owned cryptocurrencies, corporate-owned such as Facebook’s Project Libra, to decentralized cryptocurrency such as Bitcoin. Three different actors pursuing the same objective: control the digital currency landscape.
We have seen the problems that emerging countries have in maintaining their currencies under check in a fast inflationary environment.
In the last few years, there have been extreme economic situations in South Africa, Venezuela, Turkey and lately, Argentina, where many citizens realize their money is greatly losing value against hard currencies, like the USD.
Each nation’s problems has its own set of reasons and causes. However, most of the problems come from excessive money proliferation by their central banks. Much of them don’t have sound money policies to combat inflation cope on top of big USD denominated debt that becomes harder and harder for them to repay.
So there is a problem to be solved and three competing bodies to solve it.
A new wave of state-owned cryptocurrencies is surging. These are some examples:
On the enterprise side, Libra, a Facebook sponsored private cryptocurrency, which has gotten a lot of backlash from many central banks and governments, is the project that stands out the most. Libra will face a lot of troubles because it depends strongly on regulators.
Last but not least, there is Bitcoin, a decentralized ledger, borderless, immutable, censorship-resistance, and inclusive of everyone. In other words, the money of the people for the people.
As a society, we will be probed with a question in the near future: Which money system would you prefer to use?
Still, we have a choice.