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Executive summary

  • Blockchain and DLTs at large propose an alternative or reformed monetary system, which is currently a burning topic. Monetary policies are a major element of state sovereignty, so almost all central banks are at least looking at the concept, and most are working on it, following the Libra and the Chinese initiative. Also, currency domination of global trade will become an even greater strategic issue.

  • Beyond simply the question of central bank digital currencies (CBDCs), which are merely fiat on a new support, questions are increasingly being raised around the legitimacy and competence of states to manage their current fiat monetary systems. When the next major debt-related financial crisis occurs, countries that are unable to contain hyperinflation will see confidence in official fiat shaken or even destroyed. This time, however, an alternative will be available: cryptocurrencies in various forms, but with a real-world application (and this also applies to Bitcoin). The sequence of events can only be guessed, but as the current economic cycle has extended its growth, and crypto markets are staging a recovery, it might indeed be that cryptos are ready to take over when the time comes, which could be sooner than we think with the economic shock due to the coronavirus pandemics.

  • The long-awaited involvement of financial institutions on the buy side of cryptocurrencies is still in the making, but some signs indicate that new, as well as traditional banks, are moving into the custody of crypto assets, in the tokenization of fiat and stocks. This is heading in the right direction for them to gain exposure and cause them to enter the magical world of cryptos.

  • In virtually all eco-systems, players are becoming formally organized in designing a common protocol and collaborating in the development of distributed execution platforms to deploy their applications and automate their business interfaces. Throughout the various sectors, this approach is generalized and progressing fast.

  • Overall, the technical progress of DLTs continues, but this is still slow. Very few significant projects have stopped or are in a critical state. Ideas are still being developed, and there are signs that big projects that launched in 2016 or 2017 are continuing their journey, however, we still do not have a major implementation in production.