As Bitcoin becomes popular enough to deserve attention from world governments and payments in Bitcoin get accepted even by the largest companies in the world, its rapid ascension may be signaling a role more important than just a currency.
Liam Halligan, writer at the Telegraph, sees the decline of the US Dollar as the world’s reserve taking shape and the emergency of a “reserve currency basket” within a decade, including dollars, yuan, rupee, reals and roubles, as well as precious metals.
To this synthetic bundle, with emphasis placed on assets backed by commodities and other tangibles, Halligan believe central banks may include cyber-currencies (such as bitcoin) in their reserves: “If you think that’s mad, consider that mankind has long sought scarcity – be it with shells, stones or metallic elements – to store wealth. Now the money-printing taboo has been broken by yet another generation, it makes sense to use complex computer algorithms to ensure that only a certain amount of a particular currency unit can ever exist”, wrote Halligan.
This change in the system won’t happen overnight, but change is real. “The US currency accounted for just 33pc of all foreign exchange holdings in 2013, on IMF numbers, down from 55pc in 2001”. These developments are due to a number of factors, including the emergency of the BRICS (now with the establishment of the BRIC Development Bank) and China’s voracious energy appetite, bypassing the dollar as Beijing strikes deals with major countries for oil, including a rouble-yuan swap.
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