Herminio Fernández: “Physical money is in terminal decline”.

Interview with Herminio Fernández, CEO of EurocoinPay

The arrival of the euro and the digital dollar is a revolution in the world of finance, bringing down costs, but Herminio Fernández, CEO of EurocoinPay, believes that it must be accompanied by a reset of what is currently physical money in order to bring about a substantial change that will improve the economy.

We are seeing a development of the digital euro, the digital dollar, the digital yuan? How might this affect the economy and the financial sector?

Central banks have long had a monopoly on issuing paper money. Physical money is in terminal decline, the wealth of countries is nothing more than a gigantic mountain of public, corporate and private debt and they don’t know how to pay I think this current economic model is badly flawed, decentralised cryptocurrencies are a solution to this old and old money, but the authorities have no intention of allowing cryptocurrencies to fill the void without a fight and are responding with their centralised stablecoins.

These central bank digital currencies could become the most revolutionary financial innovation since the creation of money, but they will not solve the current problems of economies unless they are born with a reset of today’s money.

This would have a positive effect on the economy and the financial sector, otherwise it will be more of the same and will only serve to make this new money even more centralised and manipulated with total control over citizens, although it will be much faster in transactions and more transparent, in any case, a decentralised world in the style of the beginning of the last century with private money, public money, corporate money etc. is better for the economy. We now have this in the world of cryptocurrencies, which allows companies to finance themselves in a different way, rewarding talent and vision to the detriment of economic and patrimonial capacity. 

Will these currencies also be based on blockchain technology, and if so, what does this mean?

It means being able to compete with cryptocurrencies on an equal footing, a requirement highly demanded by financial institutions and private banks, as they need their transactions to be faster, safer and more transparent and to be able to offer their customers more digital and disruptive technological proposals that the new generations are demanding.  

Powell, Lagarde and other central bankers stress that their digital tokens are a form of “trusted” money, backed by the full credit of the sovereign issuer, meaning that this new money will be centralised and controlled by banks and governments, the opposite of what blockchain represents, a p2p system where people are sovereign over their money and do not need intermediaries to act with it, in other words this centralised money will still bear high fees, as many intermediaries are involved.

Europe pays more than 600 billion euros in transaction and payment fees every year.

Can they coexist with cryptocurrencies?

If they can do it, as I said, in the last century many types of money coexisted, and now they can also do it, indeed I would say that it is necessary for the economy, but decentralised cryptocurrencies have a very important weight in the economic and financial future, so their regulation should not be extreme, as many companies in their early stages do not have access to funding, the current model is based on a guarantee system and not on talent and value propositions, and this is where this new money wins by a landslide. 

In a scenario of digital currencies, one controlled by central banks and the other decentralised, is there not a risk of the latter gaining more and more weight?

All this new money is now being regulated and it is being done out of fear and protection of the traditional system. 

It would be convenient to see this technology as a value proposition and above all to see it as a bridge between a system that has not fulfilled some economic and social expectations, since the poverty gap is widening in the world and poor countries are not advancing at the same speed as rich ones, As a fact I would say that in the world every day more than 1 million cryptographic wallets are opened and that this new money has taken millions of people out of poverty all over the world. It is also a money that represents equality, as a bitcoin is worth the same in poor and rich countries, therefore I see the latter with more potential than computers in the seventies or the internet in the nineties, consequently the latter will be more interesting than the former.

Finally, how can investors see a revaluation of crypto in the market as a result of this central bank gamble?

Like all investors, you should be careful with your money, I would say that good cryptocurrency projects will bring great revaluations in the short term as they are part of innovation and technology both of which will be present in all sectors in the future, it would be nice if your investment portfolio had 15% in cryptocurrencies and did so as a store of value, technology will be everything in the short term.

Everything will change very fast, many sectors will disappear.

In Uber their cars will circulate without drivers and the production lines will all be robotised, the jobs will be different, as people will dedicate themselves to inventing and programming these machines that will work for them, the cars will be repaired in digital workshops without mechanics, in short, I believe that cryptocurrencies will continue to increase in value in the future and this will not depend on these central bank currencies.

Source: Dirigentesdigital.com

Disclaimer: The information set out herein should not be taken as financial advice or investment recommendations. All investments and trading involve risk and it is the responsibility of each individual to do their due diligence before making any investment decision.