The Rise of Digital Dollars

Crypto is becoming increasingly accessible, and soon digital fiat currencies will be too. Anyone in the world will be able to own assets such as ‘digital dollars’ and people will no longer be held hostage to unstable domestic currencies.

The next chapter of crypto is ‘digital dollars’

Since the creation of Bitcoin in 2008, a strategic priority for crypto companies has been helping people ‘on-ramp into crypto’ — or put more simply — buy crypto with their normal fiat money (i.e. USD, GBP, JPY). This will remain a core focus for these companies over the next few years, as less than 0.5% of the global population own cryptocurrencies like bitcoin.

However, there will also be an increased focus on a new class of digital tokens which are equipped to tear down the centuries-old barriers that have prevented regular people from using currencies outside of their domestic country.

What the crypto community call ‘stablecoins’ are, for the most part, digital tokens that represent cash deposits in regulated banks — ‘digital dollars’. Digital dollars are different from money in one’s bank account because they use the same infrastructure as crypto assets like bitcoin and ethereum. Not only does this mean they can be used anywhere, anytime, by anyone with an internet connection, but like the internet, digital dollars are not restricted to national borders.

Digital dollars will increase accessibility to international currencies

Access to safe, low-volatility currencies is something many of us take for granted. Without access to stable currencies there’s no safe haven from a plummeting domestic economy or government in turmoil.

The US dollar is the world’s reserve currency for international trade, yet only a fraction of the global population have access to it. Until now the only way most people outside the United States could access, or use, US dollars was by acquiring and holding physical dollar bills. A means of storing wealth that is clearly impractical. Not everyone owns a vault, and hiding cash under the mattress is obviously risky.

Nowhere is the need for stable currencies higher than for people in inflation-prone countries such as Venezuela, Turkey, Iran, and Zimbabwe who are watching their life savings disappear and have no other options for storing the value that they have tirelessly earned and meticulously saved over decades.

Some individuals have even begun buying crypto currencies like bitcoin as a hedge against domestic hyper-inflation, but bitcoin is volatile in its own right. Out of the frying pan and into the fire.

With the growth of internationally accessible digital assets like digital dollars, anyone with an internet connection will soon have alternatives to their shaky domestic currencies for the first time.

The world’s assets are on their way to becoming digital and more universally accessible, and at Blockchain we’re excited to do our part in bringing these options to our tens of millions of users as part of a partnership with Paxos.

Digital dollars will play a vital role in the next crypto cycle

Every few years the crypto market grows in adoption cycles; with each cycle surpassing the last. In 2011, companies like ours saw thousands of new users every month. Then in 2013 we grew users by tens of thousands per month and in 2017 it was millions of new users a month.

We’re now on the precipice of the next cycle, one which will bring tens of millions of users and believers into crypto. Without the substantial strides our ecosystem has made in making it easier for people to get started and buy crypto, this unprecedented influx would not be possible. However, in the next wave, not only will millions of people buy cryptocurrencies with fiat money, millions of people will buy digital dollars with cryptocurrencies.

This on-ramping into digital dollars will catalyze the evolution of fiat currencies in becoming borderless and globally accessible.

The regulatory reaction will slow down adoption, not stop it

Undoubtedly, there will be obstacles and pushback to the rise of digital dollars. But these efforts will only slow the inevitable, powerful impact digital assets will have on people’s’ financial freedom.

Countries like China that tightly control their currency will almost certainly look to prevent the use of digital US dollars by the domestic Chinese population. Similarly, authorities in the United States will likely attempt to limit the accessibility and usage of digital dollars outside of their direct control.

If digital US dollars become restricted, a challenger bank will soon issue a digital US bond, or Euro token. Already global tech giants like Facebook are considering issuing their own digital token (which will probably be pegged to fiat currencies). Even if these become restricted, institutions will nevertheless issue globally accessible digital tokens backed by commodities like gold, silver, or other assets.

Consumers have historically driven adoption and given the specific need digital dollars offer, it’s clear that there’s no going back now. The genie is out the bottle, and this is just the beginning.

To purchase some digital dollars, go to your Blockchain Wallet or create one today.

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