Just like any other disruptive technology, cryptocurrency required a decade to be viewed as not just a speculative and risky asset, but as the future of the world’s financial services. Today, with the entry of several financial and non-financial institutions into the crypto-space, many around the world are speculating what its role will be in the global financial system over the coming years.
Binance CEO highlighted the importance of the ongoing discussion by juxtaposing the movements of Facebook and the China-based Tencent. He tweeted,
“Tencent or Facebook? = RMB or USD stable coin world domination for the first mover. Still fiat, but world domination. Regulators in one country can’t touch the other. The can only help grow their own “child”, even if just a bastard one. Race is on.”
Governments have also joined the bandwagon by backing in-house businesses with their national currencies, primarily aimed at strengthening their position in global commerce. Further, Libra’s development roadblocks in the U.S. have further raised questions about the probability of China-based WeChat or Tencent launch competing tokens.
It is obvious that the company making the first move will possess a clear edge in terms of market domination and outreach. CZ shared a similar outlook and tweeted,
“Countries should encourage their tech giants to issue their own #crypto token (hopefully on #BinanceChain, I know, shameless).
Libra will increase US influence in many parts of the world. Imagine if Tencent/WeChat issued one before Facebook, where would that influence reside?”
Interestingly enough, for long most leading traditional financial institutions have openly refrained from participating in this race and some still continue to display a negative outlook towards crypto’s utility and ultimate motive. However, this may be changing, as has been established by the work of JPMorgan in the field of cryptocurrencies, and the participation of several other entities in the space.
While Bitcoin was established to challenge and replace the existing financial system, the rising number of token offerings are igniting speculations about the monetary intentions of corporates under the pretext of the crypto-wave.