Cryptocurrencies have grown from digital novelties into trillion-dollar technologies, drawing millions of investors and providing services such as remittances and global payments. Yet despite their increasing popularity, cryptocurrencies still face several obstacles that must be overcome for them to become the future of money.
One of the major impediments to cryptocurrency’s potential as a form of money is its current lack of consistent regulations. Different countries currently have different legal and regulatory frameworks regarding crypto, which could cause unnecessary confusion. A coordinated approach would establish credibility, encourage consumer trust and offer a safer space for innovation.
Concerns are being voiced regarding how crypto’s popularity may be misused for illicit activities like money laundering and terrorist financing, particularly with regard to those designed specifically to bypass international sanctions such as those against Iran, North Korea and Syria. Furthermore, their perceived volatility and instability make them unsuitable as an exchange medium or unit of account – however technological advancement may remedy these shortcomings and increase its potential as money.
As another barrier to cryptocurrency adoption as a form of money, its high computational requirements hinder its widespread usage as a form of exchange currency. This makes it unsuitable for most people around the world – particularly those living in developing economies lacking adequate infrastructure and technology.
Scalability is another concern of cryptocurrency; as its industry expands, processing large volumes of transactions quickly and efficiently becomes increasingly challenging. While some cryptocurrencies offer solutions – like stablecoins pegged to traditional currencies – for this issue, this issue continues to present significant hurdles to its adoption as money.
Due to these barriers, most people are unlikely to adopt cryptocurrency as their primary form of payment in the near future. However, new technologies like blockchain-based smart contracts and remittance services could offer opportunities for greater adoption of crypto.
Cryptocurrency’s growing appeal among young consumers and minorities is another encouraging indicator that it could create a fairer economy. When combined with innovations that reduce bank and financial intermediary involvement, cryptocurrency has the potential to become an equitable way of transacting business transactions.