Digital Currency Series Seven in the Eyes of Economists: Creating the Future Together (Trends)
【Editor's note】Faced with the new challenge of digital currency, economists are divided into two categories. One class scoffs, thinking that digital currency is a speculative bubble that is not worth mentioning; the other class accepts it cautiously and starts cutting-edge exploratory research. As digital currencies grow, more and more economists join the second camp.For this reason, Uncle Kai launched a series of articles on "Digital Currency in the Eyes of Economists", which is currently the most comprehensive review of digital currency literature. In terms of classification, market, exchange, price, risk, regulation and trend, it summarizes the cutting-edge theoretical research on digital currency by global economists, and provides a useful reference and reference for interested researchers.This article is the last article in the series, namely the trend article. The serialization of "Digital Currency in the Eyes of Economists" is over, thank you for your attention.
Economists love to predict the future, but they are not very accurate.
The premise of successfully predicting the future is that the development of the predicted object itself has laws that can be grasped. According to this standard,The future of digital currencies is difficult to predict.
The gray line of the grass snake, the veins are thousands of miles away.
The gray line of the grass snake, the veins are thousands of miles away.secondary title
1. From fanaticism to rationality
First of all, the digital currency market has returned to rationality from fanaticism.Although the digital currency market ushered in a small climax in the first half of 2019, compared with the peak moment of the market in 2017, no matter in terms of price, trading volume, coverage of news media reports, amount of new project financing, or the new Bitcoin In terms of core data such as addresses, the speculative enthusiasm for digital currencies has been greatly reduced. From the perspective of capital flow and market performance, new participants prefer digital currencies with relatively low risks such as mainstream currencies and exchange platform currencies.
After the cruel education of the rapid bull-bear conversion in the market, the participants gradually returned to rationality and no longer expected to get rich overnightsecondary title
2. Implementation of supervision
Secondly, regulatory measures in various countries have begun to be implemented.Since 2019, the supervision system of "license + sandbox supervision" in major countries has taken shape, and it has begun to enter the implementation stage from the stage of discussion and construction of the framework. Especially stimulated by the global non-sovereign stablecoin Libra event proposed by Facebook, regulators in various countries have to face the huge challenges posed by digital currencies.secondary title
3. The sudden emergence of stablecoins
Again, the role of stable coins (Stable Coin) is growing.The dominance of Bitcoin in the digital currency world has not changed. However, before the emergence of stablecoins, due to the emergence of tokens, Bitcoin's share of the entire digital currency market has declined. Due to the emergence of stable coins, the speed of Bitcoin's "falling out of favor" has been accelerated. The fundamental reason lies in the huge volatility of bitcoin price and the fixed output, which seriously hits the willingness of institutions and individuals to use digital currency for investment and payment.Stablecoins make up for the gap of Bitcoin, and have justifiably become the common currency in the digital currency world, and are considered to be an important gateway for the interaction between the two worlds of digital currency and traditional finance.
Due to the huge demand for stablecoins in the market, since 2017, a large number of stablecoins have sprung up in the market. In the end, USDT stood out and became the dollar in the digital currency, and no one will be able to shake its dominance in the future. Facebook's Libra plan, while igniting a new round of enthusiasm for discussions on non-sovereign stablecoins, has also brought regulatory attention and participation. The central bank digital currency (Central Bank Crypto Currency), which is also a sovereign stable currency, has also been put back on the agenda of regulators in various countries.secondary title
4. Influx of giants
Fourth, traditional financial institutions and Internet companies have made great strides into the digital currency industry. Facebook's Libra plan is just the tip of the iceberg of financial giants and Internet overlords getting involved in the digital currency industry, and it is enough to attract global attention. Giants such as Goldman Sachs, JPMorgan Chase, and Microsoft are all gearing up outside the spotlight and eager to try. ICE, the parent company of the New York Stock Exchange, has established a digital currency exchange. Institutions that are inconvenient to directly get involved in this field have deployed the digital currency industry through direct or indirect investment. Singapore National Investment Corporation has invested in Coinbase Exchange, one of the benchmarks in the digital currency industry.
The steady promotion of digital currency by these traditional financial and Internet companies will bring a clear stream that cannot be ignored in the industry, which will help the regulation and healthy development of the digital currency market.secondary title
5. Compliant STO kicks off
Finally, there will be more and more legitimate Security Token Offerings issued.In July 2019, the SEC approved for the first time the blockchain start-up company BlockStack to publicly issue the digital currency BlockStack Token in the form of RegA+, which opened the prelude to compliant STO transactions and brought a ray of hope to the long-awaited digital currency industry. Since the regulations of various countries have stipulated that ICO (Initial Coin Offering) and all token issuances similar to ICOs are securities issuances, digital currency issuers are trembling and afraid of touching the boundaries of securities laws.
For the issuance of digital currency, it is difficult to manage well if there are only restrictions and no exits. Now that the SEC has made a good start, it is believed that more and more formal digital currencies will move towards STO in the future. It is worth mentioning that among all kinds of STOs, STOs with asset backing will be more popular. The tokens issued on the market from 2017 to 2018 are mainly based on pure digital currency. With the huge fluctuations in the digital currency market, investors began to distrust digital currencies without asset backing, so digital currencies with asset backing gradually Attract everyone's attention. Coupled with the support and guidance of the US SEC for STO, it is believed that more and more tokens will be issued in the form of Asset Back Token in the future, and then registered as a compliant STO to enter the financial market under supervision .
Series postscript:
The series "Digital Currency in the Eyes of Economists" refers to a large number of academic papers and industry materials on digital currency, trying to summarize the current research on digital currency in the field of economics from the perspective of economists, covering the main aspects of digital currency Big aspects: classifications, markets, exchanges, pricing, risk, regulation and trends.
The discussion and research on digital currency, like digital currency itself, is full of controversies and challenges.This series tries to maintain a neutral perspective and balance the current views of all parties on digital currency, so that readers can have a quick and comprehensive understanding of the current digital currency research and discussion within the scope of economics through this series.
Although we collected a lot of industry materials and academic articles before writing the series, we had to re-update a lot of content 3 months after the first draft was completed. Because in just three months, many new academic research articles have emerged, and the industry has also seen frequent hotspots, such as Libra and BlockStack.
The cycle of the traditional financial industry is in units of 10 years, the cycle of financial technology is in units of years, and the cycle of digital currency is in units of months. This kind of extremely fast-changing and dynamic situation can only be encountered in the field of digital currency.
This confirms a saying in the digital currency world: "One day in the currency circle, one year in the world", which is where the digital currency field is full of charm.
(end of series)
