Cryptocurrency

A Cryptocurrency is a digital currency. It is created by electronically generating its units via a process that is controlled and regulated using encryption methods (i.e. cryptography). The transfer of funds via a cryptocurrency is also regulated and controlled via cryptography. The creation or generation of units of a cryptocurrency and the transfer of cryptocurrency funds are, in the original concept of cyptocurrency, not regulated or governed by central banks. This independence of cryptocurrencies from central banks is, however, bound to change as cryptocurrency gains more recognition and legal frameworks for its usage  are developed.

In the meantime, cryptocurrencies remain a force that is bound to impact the global money market and economy, as the hitherto economic models get redefined, and government controls get pushed out of the way to create  a new Economic Model of Free Markets. Cryptocurrency is therefore a case of technology (blockchain and cryptography) creating a new monetary system and regulating the system independently of government control and, in the process, challenging the status quo and this is why it has caused a scare to governments. The rate at which it is getting acceptance and adoption by the society ought to concern governments. The gradual adaption of cyptocurrencies is leading to Free Markets, Free Individuals, and a drift to a lateral model of the global system, thanks to the 4th Industrial Revolution.

Against the backdrop of the growing interest in cryptocurrencies, governments around the world have been exploring a form of “cashless” currency. This cashless currency has been standardized as a “Central Bank Digital Currency (CBDC)”. A CBDC is the digital form of a country’s currency, issued and regulated by the country’s central bank.

Nine (9) countries have already issued and commenced the use of CBDCs, while 14 countries are now in the pilot stage of their CBDCs. Notably, 87 countries are already exploring a CBDC. The adaption of digital currencies on a global scale is therefore not a far fetched idea, as it is actually an idea whose time is at hand, its cons not with standing.

Notably, what started as a free, self-regulating currency (cryptocurrency) is metamorphosing into a form of currency (CBDC) reigned by governments via their central banks. The traditional currency is metamorphosing from notes and coins to a digital form.