For some time, crypto enthusiasts have been expecting the day that crypto coins replace fiat currencies. This implies that a large majority of people would use cryptocurrency instead of traditional money.
Recently, the Republic of the Marshall Islands developed a national currency based on blockchain as the country will experience a transition from fiat to cryptocurrency in a couple of years. Even though there are only over 60 thousand citizens in the country, it received much interest after the news broke out.
A question arises: why don’t countries want to adopt cryptocurrencies?
Well, there are a couple of reasons.
1. Lack of Regulation
If there’s one thing that cryptocurrencies are famous for, it’s their involvement in illegal activities. This stems from the unregulated nature of the market.
Cryptocurrencies were created with the notion of decentralization and it’s also among the reasons why these digital currencies attracted attention. Yet, for authorities in many countries, this is one of the main issues.
The United States Dollar, for instance, has a stable connection to the Federal Reserve, the central bank of the United States. The application, circulation and most aspects of the USD are controlled by the government. By accepting cryptocurrency the government loses a portion of control over the financial sector.
2. Complications for Adoption
Cryptocurrency is not at the stage to be freely used in the country nowadays. Most people still don’t know what crypto coins are or how they should be used. Even though the interest in the market is rising yearly, it would be almost impossible to shift millions of citizens into using crypto coins.
Since most people are still skeptical about cryptocurrency, such a radical change may stir up unwanted attention. In order to avoid this situation, the public has to be more educated about crypto coins. In advanced countries like the US, companies are slowly accepting crypto coins and consumers are turning their attention towards these currencies.
The stable nature of traditional currencies helps to maintain the global financial system in check. The volatility of fiat money is very low which enables the prevention of major financial problems and pricing of services and goods.
During the last ten years, crypto coins have displayed high volatility levels fluctuating from $20 thousand to $3.5 thousand in a matter of 12 months. Even though crypto traders make large amounts of money because of this watching their cryptocurrency portfolio tracker as the price of their portfolio goes up, the daily consumer won’t be so pleased.
This issue will subside once crypto coins reach mass adoption, however, no one knows how much it will take to reach that point. If crypto coins cause economic issues the government won’t be able to make more coin, leaving the economy in a vulnerable state.
Cryptocurrency transactions are considered pseudonymous: tracking your activity is almost impossible. Yet, authorities see this as an issue. The inability to monitor transactions can result in fraud and other unlawful actions.
The answer to this is issuing the country’s crypto coins that can be effectively monitored, still, this may not seem like the best solution to crypto enthusiasts.
Cryptocurrency, especially crypto investment, is gaining popularity. However, crypto investment can become very time consuming when you consider monitoring all of your crypto-assets. If you want to know how to do this efficiently check out the best cryptocurrency portfolio tracker guide.