FILIPINOS invested in cryptocurrencies would do well to study closely the insight shared recently by technology research company Canalys. It believes there is no coming back for cryptocurrencies.
In a briefing with reporters on Thursday, Canalys President and CEO Steve Brazier said he subscribed to renowned economist Nouriel Roubini’s reservations about cryptocurrencies.
Brazier said the recent slowdown in cryptocurrency activities signals the end of Bitcoins. This will also severely affect blockchain since, he said, without cryptocurrencies
it becomes nothing more than a spreadsheet.
“There’s a lot of activity, a lot of investment around blockchain, that’s certainly true.
It’s also true that the poster child of blockchain is cryptocurrencies,” Brazier said. “They will be heading to the value of zero.”
Brazier said that since June and July this year, cryptocurrency “activities stopped” and that there was no coming back from this. He said blockchains are expensive—a matter that is compounded by the fact that shady investors are riding the bandwagon and are using it for their transactions.
He said most of the activities connected to cryptocurrencies were of the criminal kind such as drug dealing. Brazier even said some terrorist organizations use cryptocurrencies.
The Canalys executive also said that with the collapse of cryptocurrencies, it would be difficult to define what blockchain technology is.
This leads him to believe that blockchain was all a hype.
“Since June, July this year, almost all their activities stopped. The cryptocurrencies have collapsed. We doubt they will recover. It was a hype. It was a bubble,” Brazier said.
“We remain skeptical about how important blockchain will be. In a way, it’s a shared spreadsheet, Excel file. There’s a lot of hype. Whether it really changes the world the way people hope, we doubt,” he added.
Last year blockchain technology was forecast to have the potential to dramatically increase the security of cross-border financial transactions and logistics even in countries where these services are relatively underdeveloped.
This technology has the potential to benefit the smallest firms in the poorest countries of the Association of Southeast Asian Nations. The rise of online marketplaces also provides platforms for MSMEs to access regional and global markets.
Thrice original size
In 2017 the Bangko Sentral ng Pilipinas (BSP) said the use of cryptocurrencies in the Philippines has grown three times its size from when regulators first issued guidelines.
From transactions valued at some $2 million a day in February this year, cryptocurrency transactions at present average $6 million daily instead, or an escalation by 200 percent.
But cryptocurrencies, most notably Bitcoins, are hounded by issues of trust and are infamously volatile, which is why their adoption has not been as widespread as their supporters want them at this point. And this is also why the BSP is still evaluating the use of cryptocurrencies in local commercial transactions before allowing their unhampered use in the Philippines.