The German finance minister expressed his doubts on the potentials of cryptocurrencies replacing fiat currency at the moment. Olaf Scholz stated this while discussing cryptocurrencies at a dialogue recently.
Olaf Scholz Thoughts On Cryptocurrency
Olaf Scholz, the German finance minister, noted his opinion on cryptocurrencies globally at the dialogue which took place at the German-Dutch Army Corps in Münster recently.
The finance minister compared cryptocurrency with the tulip fever bubble in the Netherlands during the 17th century. The danger that surrounded the tulip fever is described as similar to what is prominent with cryptocurrency today. To this, he stated that he doubted cryptocurrency efficiency for a currency model.
Notably, digital currencies have been covered with a lot of doubts with several scam reports, hacks and different malicious schemes on a daily bases. This makes the industry disinteresting to newbies in the industry. This was noted by a cryptocurrency enthusiast recently that it should not deter necessary investment to be made now, as the market was compared to the emerging days of the dot-com era.
Scholz further noted that mass implementation of cryptocurrency requires an enormous investment in computer and also involves high intensive energy that could make it ineffectual. However, Scholz could not speak of what the industry might turn to in the next 20 and 30 years.
Cryptocurrency As A Currency
Meanwhile, cryptocurrency has been turned to as not only a means of storage of value but also usage as a means of currency. This has seen more growth in countries presently battling with acute inflation and regions with poor banking facilities. Notably, Zimbabwe, Turkey, Iran, Venezuela among others have adopted it the most.
Despite this, the use of cryptocurrency is still centered around the storage of value and speculative investment, then its function as a currency. This was especially revealed by the Weiss rating recently that Bitcoin has failed as a currency.
Scholz opinion, however, may be valid for the moment, but as he opined that in the next 30 to 40 years, he could not speak of the industry. The cryptocurrency is expected to have taken the world by surprise by growing to its full status by then.
Cryptocurrency In Europe
After some Asian countries, Europe has been more advanced in promoting cryptocurrency and the blockchain tech than other regions of the world.
Notably, the effort of the European Union in working towards a collective regulation for the cryptocurrency industry in the region is noteworthy.
Also, the recent comment of the European Commission’s Vice-President Valdis Dombrovskis, that cryptocurrency has come to stay shows the excellent value cryptocurrency holds in the future.