Vitalik Buterin, the co-founder of Ethereum, has questioned the likelihood of cryptocurrencies taking over the global financial system.
Buterin stated that despite the crypto sector’s tremendous growth and adoption in recent years, he expects traditional and government-backed currencies to stay dominant, according to Reuters on June 16.
“I do not expect cryptocurrencies to take over the world. It’s about cryptos and digital and governments,” Buterin said.
Notably, with digital currencies finding applications in payment and investing, there is debate over the extent to which various cryptocurrencies can replace traditional financial systems.
The regulatory impediment
Although crypto supporters advocate for digital assets to replace traditional financial products, laws are emerging as the primary impediment. This occurs as several governments like the United States, establish and propose laws to regulate space.
Following the collapse of the Terra (LUNA) ecosystem, the necessity to manage the crypto industry has surfaced in recent days. The disaster wiped out millions of dollars in investments, prompting various countries, notably South Korea, to establish severe regulations to oversee the sector.
Furthermore, Buterin’s thoughts on the future of cryptocurrency come at a time when governments such as El Salvador have allowed the use of Bitcoin as legal tender. Previously, the Ethereum founder called El Salvador’s Bitcoin requirement reckless, and he scolded those who supported it.
Buterin believes that pushing for crypto acceptance without a basic understanding will lead to scams.
CBDCs are being used by governments.
The introduction of Central Bank Digital Currencies is one-way governments are attempting to limit the proliferation of cryptocurrencies (CBDC). Notably, numerous nations are in the advanced phases of developing CBDCs.
Buterin’s remarks are consistent with the Reserve Bank of India’s (RBI) belief that the emergence of CBDCs will put a stop to private cryptocurrencies.
According to market analysts, the decentralisation of most cryptocurrencies is considered a danger to many countries. Notably, governments now have total control over money, and crypto disruption is regarded as a threat.