Crypto: The monetary revolution is underway - KPMG

Ladies and gentlemen, take a seat for a ride in the thrilling world of digital assets. KPMG has deployed its antennas to capture signals from the rapidly changing financial markets. This report takes stock of the ongoing revolution, where crypto, stablecoins, and CBDCs (Central Bank Digital Currencies) are redefining the rules of the game.

The Emergence of Digital Assets

In this corner of the financial Wild West, cryptocurrencies are the new sheriffs. Bitcoin (BTC) and its companions play the cowboys of the economy, standing out for their volatility but also for their disruptive potential. KPMG, in its report “Digital Money: Market Perspectives From Across The Digital Assets Ecosystem”, highlights that these digital assets have gained credibility, attracting institutional investors.

The financial giants can no longer ignore them. However, the Wild West remains dangerous: regulation is fumbling, oscillating between permissiveness and strict control. Legal uncertainties have not slowed down the momentum, but they could be a major hurdle if they do not get clarified.

Crypto, by its decentralized nature decentralized, forces authorities to rethink their approach, juggling between innovation and consumer protection.

Stablecoins and Their Quest for Stability

Like tightrope walkers on a wire, stablecoins seek to combine the stability of traditional currencies with the innovation of crypto. Their promise? A stable value backed by real assets. KPMG reveals that these instruments are gaining momentum, particularly for everyday transactions and international trade.

However, this wire is thin and the risk of a fall is ever-present. The crypto Terra scandal, whose value collapsed, is still fresh in everyone’s memory. Regulators closely scrutinize these new financial creatures, ready to intervene to avoid a domino effect on the global financial system. For stablecoins, the hour of maturity is approaching, and they will need to prove their robustness to endure.

CBDCs and Monetary Reinvention

The latest innovation: central bank digital currencies (CBDCs). These state entities want to take the reins of the digital revolution. Unlike anarchist cryptocurrencies, CBDCs are overseen by monetary authorities, promising security and regulation.

KPMG highlights ongoing pilot projects from China to Europe, with each country looking to carve out its niche. CBDCs could transform monetary policy and payment systems, but their implementation poses technological and ethical challenges. Privacy, cyber security, financial inclusion: the questions are numerous. CBDCs could well be the secret weapon of states to maintain their monetary sovereignty in the digital age.

The battle for the control of the money of the future is just beginning. Between wild cryptos, tightrope stablecoins, and disciplined CBDCs, the digital asset ecosystem is a complex and constantly evolving playing field. KPMG offers us an accurate x-ray of this financial jungle, where each actor attempts to find their place under the watchful eye of regulators.

A show to watch closely, as the outcome of this battle will shape the economy of tomorrow.