Deutsche Bank chief strategist Jim Reid said the current system of fiat money is unstable and is coming to an end. He said the system was only able to move forward in its current state due to the disinflationary shock it experienced in the 1980s.
In his recent report, Reid claimed that the fiat system is now reversed and should affect all the traditional currencies used in the world.
However, he said that strategies used to control inflation as loose policies, significant leverage, and continued printing of money can lead to the end of paper money. Consumers around the world will lose confidence in the system as currency fi nances will continue to lose value.
Reid added that to help mitigate the risk of financial collapse, the use of virtual currencies should be promoted around the world. He felt that due to their decentralized nature, cryptocurrencies can not be controlled by governments but by the organic laws of the economy, especially supply and demand in the market.
“Although the current speculative interest in cryptocurrencies is more related to Blockchain technology than to the loss of confidence in paper money, there is likely to be a means of exchange that will become more universal and a paper competitor. change.”
Reid’s opinion parallels the opinions of other important personalities. Among them is the President of the Turkish Central Bank, who said that virtual currencies can contribute to financial stability. The central banker noted, however, that there are potential risks associated with digital currencies.