While conspiracy theorists and attention-hungry commentators continue to misrepresent the so-called ‘Great Reset’, this simply describes the global drive to improve and redefine the world for the better in the wake of the coronavirus pandemic.
A key element of this is the push towards a cashless society, which is currently being led by China. According to recent datasets, an estimated 87% of consumers in China’s huge financial market now use fintech services, while continuing to underpin a mobile payment market worth $29 trillion.
A cashless society could also pave the way for nations to roll out decentralized digital currencies. But would this actively improve the world and what are the tangible benefits for society?
What are the Benefits of a Decentralized Currency?
We’ve heard talk of decentralized currencies for more than a decade now, ever since the financial crash of 2008.
Interestingly, the reasoning behind the deployment of a decentralized currency also betrays one of its core benefits, as this type of payment infrastructure insulates customers from the type of banking or market collapse that precipitated the great recession.
On a similar note, a decentralized currency can safeguard users against aggressive banking policies and excessive transaction fees, which may also be imposed during times of economic tumult and crisis.
If we delve further into this, we can also see that any currency free from the control of banks will not be directly impacted by monetary policies. This is not the case at present, where the value of fiat currencies can be dramatically undermined by the reduction of base interest rates and the manipulation of inflation.
This is something that has to be factored in by online and MetaTrader 4 traders, and while a decentralized currency may reduce volatility in the forex market, it would undoubtedly help developing nations will destabilized currencies (such as Venezuela) to achieve greater stability and growth.
Also read: 5 Benefits of using Crypto Software
Would Decentralised Currencies Benefit the World?
Interestingly, this vision for decentralized currencies does not describe the infrastructure implemented in China, with the state government here retaining control and authority over the so-called “Digital Currency Electronic Payment” (DCEP).
This is effectively a digital version of China’s official currency (the yuan), with the national government hoping that this will ultimately displace the US dollar at the epicentre of a new and completely digital global payment system.
In many ways, this would not revolutionize the financial system in the same way as a truly decentralized currency such as Bitcoin, as it would undermine the core benefits of cryptocurrency tokens and incentivize other nations (particularly the US) from participating fully.
For the world (and most importantly, its everyday citizens) to truly benefit, nations would have to commit to replacing their fiat currencies with completely decentralized alternatives, eschewing governmental control in exchange for a completely transparent and digital marketplace.
This remains some way off for the time being, although there’s no doubt that Covid-19 has potentially accelerated the transitions to digital currency and payment methods on a global scale.