How do cryptocurrencies affect Global Economy?

[coupable]

Central banks are based on producing fiat money within controls and according to a corresponding stock of metals such as gold, or a reserve of major currencies such as the US dollar.

As for encrypted currencies, they are not subject to any controls of any kind and are produced by individuals (mining). However, some countries that are subject to economic crisis's or international sanctions have exploited these digital currencies and used them in their favor within controls ; The Venezuelan government issued a central digital currency called "Petro" and linked its price to the price of a barrel of local oil which means linked it to oil and precious metals. Also, China has also issued the Chinese yuan, which is a digital currency different from the decentralized blockchain.

Is it true that cryptocurrencies will weaken the global financial system? That system which is managed by countries with the strongest economies with their currencies that has gained wide acceptance to be traded in financial markets all over the world.

This would have an impact on the global economy and the entry of digital currencies would weaken these countries from their control over the economy if other countries start to follow the same approach as the Venezuelan government, as the currency of these dominant countries used in commercial transactions and which has been linked to the prices of gold and precious metals will face Digital currencies whose printing and issuance are not controlled by any official entity.

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[Lucius]

If we were to compare the total value of all cryptocurrencies, then according to the CMC market cap, it would currently amount to a little more than $800 billion - and for comparison, the US defense budget for last year was about $780 billion. I think that this speaks more than enough about the importance of crypto-currencies on the global economy, and the so-called CDBC should not be mixed in, because apart from the digital aspect, there is nothing different about it from money as it exists today.

As for the petro-dollar, I think that project is far from any success, and I doubt that anyone will copy it, but China and its CBDC are a different story because they are forcing it without asking the opinion of their residents. In some further development, that currency could be accepted by some other countries that are politically and economically close to them, but it is more likely that it will still serve them for even greater control over their residents with all the measures they are already implementing.

[Upgrade00]

However, some countries that are subject to economic crisis's or international sanctions have exploited these digital currencies and used them in their favor within controls

Creating your own CBDC as a nation and backing it by any asset you wish or running it on any system does not impact the cryotocurrency market. It is just a way for governments to try and benefit from the blockchain technology.
Nigeria also created theirs during the peak of the Bitcoin revolution and it has been a failure so far, while Bitcoin continues to grow in popularity.

Is it true that cryptocurrencies will weaken the global financial system? That system which is managed by countries with the strongest economies with their currencies that has gained wide acceptance to be traded in financial markets all over the world.

Not in the near future. Bitcoin is still a budding technology and as an alternative currency for nt weaken any of the major currencies. In the distant future when it's target market continues to grow and global adoption as well, it could become more dominant.

[coupable]

However, some countries that are subject to economic crisis's or international sanctions have exploited these digital currencies and used them in their favor within controls

Creating your own CBDC as a nation and backing it by any asset you wish or running it on any system does not impact the cryotocurrency market. It is just a way for governments to try and benefit from the blockchain technology.
Nigeria also created theirs during the peak of the Bitcoin revolution and it has been a failure so far, while Bitcoin continues to grow in popularity.

No one can prevent any country from issuing its own version of the digital currency. However, given that this could reduce the power of the major countries over these economies, it is assumed that a defect will occur in the current system.
A poor country suffering from economic pressures cannot issue a paper currency except according to certain conditions and formulas, while it can issue an electronic currency without the need for any intervention, and it is sufficient to have a stock cover to give the currency its value. The large countries that control the global financial markets realize the danger if the Venezuelan experience is generalized.

[Gozie51]

I don't think there is any impact that CBDC does to cryptocurrency. Moreover Venezuela or China are not the only country that has adopted it but no impact felt in global market because of it, at least no report so far by no one to the effect as said that CBDC is responsible for decline or push to the price. Nigeria is also one of the countries that have adopted or created digital currency and I think that creation was for the purpose of pushing the local currency as digital and nothing more because no positive effect so far to the Nigerian economy or the support for CBDC contributed to rise in global economy .

[coupable]

I don't think there is any impact that CBDC does to cryptocurrency. Moreover Venezuela or China are not the only country that has adopted it but no impact felt in global market because of it, at least no report so far by no one to the effect as said that CBDC is responsible for decline or push to the price. Nigeria is also one of the countries that have adopted or created digital currency and I think that creation was for the purpose of pushing the local currency as digital and nothing more because no positive effect so far to the Nigerian economy or the support for CBDC contributed to rise in global economy .

With the exception of China, the rest of those countries that issued their digital version of the currency are going through economic problems, including financial dependence on the great powers. On this basis, they cannot link their CBDC currencies to their local currencies, unlike China, which has the digital yuan as an electronic version of the yuan fiat.
According to some articles, Britain is also in an experimental stage to generalize the use of CBDC, but there is no information about the reason for the delay or the launch date.

[Merit.s]

CBCD is been created by government of a country to minimize fiat currency which is depreciating gradually. It does not have any effect on the global economy and it is not also a decentralized currency. No matter the way it is presented to the citizens it still remains centralized. So if a country creates its own digital currency and link it to gold or oil barrel price it still will not change anything.

[lionheart78]

This article[1] is a good read answering @OP's title on how cryptocurrencies affect global economy.

The article answered how will global investments be impacted. It stated that it hedges the portfolio from potential risks the main reason for the rise of cryptocurrencies across various exchange-traded products.

It also stated the benefits of the global economy on cryptocurrency since it speeds up transactions, having no intermediaries results in lower fees, less need for a physical structure that gives lower fixed cost due to no need for wages, rent expenses, and utility bills. There is no global barriers since cryptocurrency has no boundaries and it facilitates easy and quick trade for corporations (reason why SBF can easily comingle FTX funds with Alameda)

In addition, it also stated that entreprenuers can receive payment in more currency which helps them get financial coverage and liberated financial connection.  Since the cryptocurrency network is backed by distributed ledger technology. It is automated and digitized too. Thus, it eliminates the risk of fraud and corruption, the biggest dent in the traditional financial system.[1]

Cryptocurrency also enable financial inclusions[1] and blockchain and cryptocurrency can help build greener future.[1]


[1] https://internationalfinance.com/how-cryptocurrency-reshape-global-economy/

[Findingnemo]

Central banks are based on producing fiat money within controls and according to a corresponding stock of metals such as gold, or a reserve of major currencies such as the US dollar.

Do you really beleive this statement? Maybe many did until 2020 but that year really proved banks are printing the amount of money they wanted not based on reserves or anything as they did in 19th century so these fiat currencies are already weakening and this time we have an alternative to those papers so called decentralized currency which isn't doing anything bad do the economy meanwhile protect the users from inflation and actual value depends on demand and supply rule.

[Hispo]

Allow me to let you know that the "Petro" experiment in Venezuela was a failure, it was all smoke and mirrors. In reality, that coin had no actual demand in the market and the little demand it had, was created artificially by the government. It is not decentralized either, by the way.

If the talk about Bitcoin and other cryptocurrencies, their impact is easier to observe and measure at local and national levels, because these assets suits the necessities of certain countries very well, being nations like Argentina, Venezuela and Nigeria good examples. The adoption is still concentrated in regions.

[mk4]

Is it true that cryptocurrencies will weaken the global financial system?

Specifically — Bitcoin will weaken government-controlled fiat currencies assuming things go well for Bitcoin, hence weakening government control. Not necessarily that it will weaken the economy.

As for "crypto", it's still very much unlikely to replace most of digital ownership like stocks due to regulatory reasons. It's much easier to decentralize a currency/SoV than a business ownership certificate.

[uneng]

The global financial system is weak by itself, by the inefficient adopted policies to keep inflation under control and to allow governments to create more public expenses. The global system is weak because long term measures aren't adopted by regulators and economists, since they are considered unpopular. I believe bitcoin is just an escape for those who see this reality in front of their eyes, but can do nothing, since most people are blind and careless about the situation. I see bitcoin's effect isn't in a global scale, but on the individual one, as it's impacting the lives of its adopters singly. To have a major effect, bitcoin adoption should be more widespread at this point, what isn't the case.

[retreat]

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Is it true that cryptocurrencies will weaken the global financial system? That system which is managed by countries with the strongest economies with their currencies that has gained wide acceptance to be traded in financial markets all over the world.

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Instead of weakening it, cryptocurrencies complement the global financial system. In my opinion, cryptocurrency appears not as a competitor or a technology that disrupts the global financial system but as an alternative technology which will innovate and advance the global financial system. Just imagine if cryptocurrency didn't appear, maybe until now we are still monopolized by old school transaction systems, which are not fast enough, weak, prone to hacking, high fees, etc. With the emergence of cryptocurrency, it will awaken the central bank/banks to be able to improve their system and present a transaction system - which, although not better than cryptocurrency - is still good enough and helpful for customers. We as users with the presence of cryptocurrency are also given alternative options to complete their transactions, and we really need this.

[Golfler]

The more users there are, the less Bitcoin will be controlled by a few people in the market. Of course, at a certain stage of mining, it is not impossible to rivet whether the price stability will become the world currency. You can print as many dollars as you want, but Bitcoin No, I think this is the basis for Bitcoin to become the world's currency.

[jostorres]

CBCD is been created by government of a country to minimize fiat currency which is depreciating gradually. It does not have any effect on the global economy and it is not also a decentralized currency. No matter the way it is presented to the citizens it still remains centralized. So if a country creates its own digital currency and link it to gold or oil barrel price it still will not change anything.

I don't think that is their purpose of creating it but the more obvious reason would be is to counter crypto. CBDC's are I think backed by a real fiat so it does not help either in terms of cutting the inflation. Cryptos aren't tied to any local currencies so it's the one that doesn't have an effect to the global economy but CBDC's can even though CBDC's are close to being a crypto since they also runs in the blockchain.

CBDC's are centralized but the creators of it didn't denied it either and then the public already knows this even without any explanation but only by knowing their origin or where they came from. I don't know if CBDC's can be linked with gold and oil but if it's possible then the more it will affect the global economy.

[Leviathan.007]

I don't think there is any impact that CBDC does to cryptocurrency. Moreover Venezuela or China are not the only country that has adopted it but no impact felt in global market because of it, at least no report so far by no one to the effect as said that CBDC is responsible for decline or push to the price. Nigeria is also one of the countries that have adopted or created digital currency and I think that creation was for the purpose of pushing the local currency as digital and nothing more because no positive effect so far to the Nigerian economy or the support for CBDC contributed to rise in global economy .

The effect of bitcoin and cryptocurrencies on the global economy is not something we can ignore, but the CBDC is not something related to the bitcoin and cryptocurrencies, CBDC is something created by the governments and the central banks and that's not something decentralized at all but bitcoin was the reason for the creation of CBDC, I think that's part of bitcoin and cryptocurrencies effect on the world economy, but the other side of this effect can be some governments like El Salvador using bitcoin for their own payments systems and this effect can even grow over time.

[bangjoe]

That's how the government wants to keep control over the people's finances, because if decentralized they can't do anything if something bad happens to the people and the more precise reason is that they can't take advantage, especially the bankers.
Because basically, the industry that will be disrupted when crypto adoption takes root is banking, if you look at it today the aspects contained in banks are already in DEFI so it will be easy for Blockchain technology to shift the highest throne of financial institutions.
CBDCs may be a backup plan to be an option for the government to keep control of finances and as an alternative form of currency that people can use to keep themselves away from crypto.

[tabas]

Those countries that are making their CBDC, they're totally out of the circulation and market cap of the entire crypto market because they're not really cryptos.
They're just making it look like that those CBDCs are crypto because people will get to hooked with its name and descriptions. But other than that, the crypto market shall be a stand alone market and that's what the governments are trying to compete because they see that there's a huge market and money that they can get to touch with it. And that means for them and financial institutions that they can no longer ignore the importance that it has got for the global market.

[chrisculanag]

There has a good and bad effects on every country's economy. It's good because the transactions that are important to businesses will be faster, the fees are also lower and it's safe to use. Because of this, each country's economy can grow depending on how they handle it.
The possible negative effects are can be used for illegal activities such as the smuggling of weapons and contraband that can indeed strengthen the economy but affect opposing countries.
But if they find a solution to control it, it will surely have a good effect on every country.

[Eternad]

Those countries that are making their CBDC, they're totally out of the circulation and market cap of the entire crypto market because they're not really cryptos.
They're just making it look like that those CBDCs are crypto because people will get to hooked with its name and descriptions. But other than that, the crypto market shall be a stand alone market and that's what the governments are trying to compete because they see that there's a huge market and money that they can get to touch with it. And that means for them and financial institutions that they can no longer ignore the importance that it has got for the global market.

A simple listing of CBDC on popular price aggregator like cmc and coingecko an brainwash and accept it as cryptocurrency by the majority. This is same with USDT which we all know how shady it is but people and majority of exchange use it as main pair of all crypto for stable coins despite the risk.

No matter how hard we can fight against it. They can easily target the foolish mind of normal crypto holder to make think that it is part of the crypto market.