Of course, everybody knows that traditional finance is not just going to give up. Banks that are making massive amounts of money from transactions, loans, and other services that they offer will not just give up and shut down because a more convenient, faster, cheaper, and decentralized system has emerged.
They have fought back in many different ways already, from banning crypto as a means of payment to openly warning people against cryptocurrencies, using the worst examples of incidents that happened in the crypto world, and mentioning none of the advantages. They even tried launching their own cryptocurrencies, the so-called Central Bank Digital Currencies (CBDCs), where China is currently in the lead.
But, fortunately, the industry managed to survive all of that, and the question of crypto and blockchain remains open — is it possible to someday create a global payment system powered by crypto?
Global Crypto Payment System
The answer is yes, in theory, although, in reality, there are many roadblocks and problems that need to be resolved.
Obviously, the banks will not go down quietly, but let’s put that aside for now. The crypto industry itself is still at a very young age, which makes it unreliable and mostly experimental, even now, 12 years since the launch of Bitcoin.
There are issues like volatility that are preventing the adoption, as you cannot put your money into an asset that can go up and down by hundreds, or even thousands of dollars every time when bad news gets reported. Then, there is the matter of scalability and high transaction fees.
Crypto and blockchain have promised extremely cheap transactions, but many of them do not have blockchains that are powerful enough to deliver on this promise. Take Bitcoin and Ethereum as examples. Both are very promising in theory, but in reality, they get overcrowded extremely easily, and in order to have your transaction processed quickly, you need to pay a higher fee. This pushes the average fee further and further up, which goes against the basic idea of cheap transactions.
The ability to make a transaction at any time and send the money to any place in the world instantly is a great advantage, and this, at least, is already possible. But, the problems of adoption, scalability, and volatility remain to be solved.
There is potential for this to happen someday, as more powerful networks continue to emerge, and the CBDCs are likely going to be the ones that will come the closest to global payment systems. However, since they will be centralized, this will not be the solution that people originally sought, which is why decentralized solutions will likely continue to grow and improve.
In the end, it might take years, or even decades for a ‘real’ crypto payment system to take over, or it might never happen at all, if the industry loses its motivation and desire to go fully decentralized, although the chances of this happening are quite slim. People have simply had enough of the banks ruining the economy, and the world has matured enough to start moving towards decentralization. So, while there is definitely demand for a decentralized global payment system, there are still all the issues that need to be solved for it to happen.