Vitalik Buterin, a co-founder of Ethereum, has expressed doubt about the likelihood of cryptocurrencies assuming control of the global financial system.
Reuters reported on June 16 that Buterin expects conventional and government-backed currencies to stay dominant despite the crypto sector’s tremendous development and acceptance in recent years.
“I do not anticipate that cryptocurrencies will conquer the globe. It’s about cryptocurrencies, digital, and governments,” added Buterin.
Notably, as digital currencies find applications in payment and investing, there is conjecture over the degree to which various cryptocurrencies may replace conventional financial institutions.
The regulatory obstruction
Despite the fact that proponents of cryptocurrencies are pushing for digital assets to replace conventional financial products, laws are emerging as the greatest obstacle. Different jurisdictions, such as the United States, are enacting and proposing laws to control space.
Following the collapse of the Terra (LUNA) ecosystem, the necessity to manage the cryptocurrency industry has surfaced in recent days. The disaster wiped out millions of dollars worth of assets, prompting various countries, notably South Korea, to establish stringent regulations to regulate the industry.
Moreover, Buterin’s thoughts on the future of cryptocurrencies come at a time when countries such as El Salvador have legalised Bitcoin as legal cash. Previously, the inventor of Ethereum has criticised supporters of El Salvador’s Bitcoin mandate as irresponsible.
According to Buterin, promoting cryptocurrency acceptance without basic understanding will undoubtedly end in fraud.
Governments are embracing CBDCs
Through the introduction of Central Bank Digital Currencies, governments are aiming to limit the proliferation of cryptocurrencies (CBDC). Notably, some nations are in the advanced phases of CBDC research.
Buterin’s statements agree with the belief of the Reserve Bank of India (RBI) that the establishment of CBDCs would put a stop to private cryptocurrencies.
According to market experts, the decentralisation of the majority of cryptocurrencies poses a challenge to many jurisdictions. Notably, governments have exclusive authority over money, and crypto disruption is seen as a danger.