Deutsche Bank has released a new report titled ‘Digital Currencies: the Ultimate Hard Power Tool’, which projects that digital currencies could become mainstream within the next two years. However, the major caveat is that they expect some sort of centralized cryptocurrency to dominate the world rather than Bitcoin (BTC).
Basically, Facebook has a userbase of 2.5 billion people, and if the Libra cryptocurrency launches then it could quickly see mainstream adoption. The problem with this theory is that governments have put intense regulatory pressure on Libra, so it is doubtful if Libra will ever launch. This is due to the fact that Libra would basically be competition for Central Banks and national fiat currencies, and could, therefore, siphon away power from governments.
The other option is that China will launch its national cryptocurrency pegged to the Chinese Yuan (CNY), and this would have a userbase of 1.4 billion people, which is the population of China.
As for Bitcoin (BTC), Deutsche Bank thinks it is too volatile to be used as a truly global currency.
All of this being said, mainstream cryptocurrency adoption would not mean much if it comes via a centralized currency like Libra or China’s central bank digital currency (CBDC), since although such currencies would utilize cryptocurrency technology, they would have the same downfalls as fiat currency, which are unlimited money printing and centralized control to seize and freeze money at will.
Overall, this Deutsche Bank report is par for the course for the financial industry’s opinion on Bitcoin (BTC). It seems Deutsche Bank is missing the big picture, where Bitcoin (BTC) could become a dominant global currency due to its decentralized characteristics.