All arguments against cryptocurrencies have a common basis – the fear that it would disrupt financial stability. From the UK to the USA to Russia, officials from every country have raised concerns about it. However, it does not seem to be going that way as far as present trends indicate.
In a reiteration of this highly common argument against crypto, the Bank of England said the cryptocurrencies could pose threat to the financial stability of the nation. The same argument has been made by politicians, anti-crypto entrepreneurs, judiciary bodies, and financial institutions. That raises an important question – do cryptocurrencies really pose a threat to economic stability? To understand that, we must look into the core of cryptocurrency – decentralized finance.
The concept of decentralization does not work well in the traditional understanding of a nation. Similarly, a concept like that of ‘national economy’ is grounded upon centralization. If a financial system comes along and claims to do away with centralized institutions, it is bound to cause uproars and spark fear.
However, that does not make the fear true. Crypto experts have said for a long time that the goal of Bitcoin is not to take over fiat currencies. Instead, it creates an economy of its own that is free-flowing, transparent, secure, and dependent on cooperation. It rules out the role of an intermediary, and in doing so, makes all communications peer-to-peer. While the technology itself has no intentions of destabilizing the economy, many continue to be afraid of its decentralized model.