Dear Reader,

Van Bryan again, Jeff Brown’s longtime managing editor. Today we continue Jeff’s 2020 prediction series. (Be sure to catch up on Jeff’s predictions for 5G, AI, and genetic editing.)

Today, we turn to the world of blockchain and digital assets. As an active member of the blockchain advocacy group, the Chamber of Digital Commerce, Jeff has an insider’s perspective into the world of cryptocurrencies and digital assets.

Today, he shares why Facebook’s Libra was only the beginning and why state-backed cryptos will replace the fiat system we use today. Read on…

– Van Bryan

Van Bryan: Jeff, today we’re going to talk about blockchain and digital assets and what you see in the space next year. But I think we have to start with the big story from 2019, Facebook’s plan to launch its own cryptocurrency. Could you bring readers up to speed?

Jeff Brown: Absolutely. So in May of this year, news outlets like The Guardian and Business Insider were running headlines like “Facebook Plans to Launch ‘GlobalCoin’ Cryptocurrency in 2020.” They were reporting on rumors that Facebook was planning to launch its own cryptocurrency next year.

But I knew they had it wrong. I heard chatter from some of my contacts. I told readers of The Bleeding Edge in June that Facebook’s cryptocurrency would be called Libra and that the white paper would be published on June 18. Sure enough, that’s precisely what happened.

For anybody who missed it, Libra will be a “stablecoin.” That means it will be backed by a basket of fiat currencies. And Libra will be fully fungible. In other words, users will be able to convert Libra into bitcoin or fiat currencies like the U.S. dollar.

Van: But Facebook’s Libra plans have been encountering stiff resistance from lawmakers. Facebook CEO Mark Zuckerberg went before Congress in October. Several members of Congress were very open about their opposition to Libra. Why do you think that is?

Jeff: Here’s the important thing to remember. Facebook has a user base of 2.38 billion people. That’s about 31% of the global population. With that many people connected to its network, Libra would certainly gain immediate adoption. It would essentially be a world reserve currency overnight.

So a cryptocurrency like Libra could directly threaten the government’s “monopoly” on currency creation. So it’s really no surprise that the government would be so wary of Facebook’s Libra.

Van: Do you think Facebook’s Libra will get off the ground in 2020?

Jeff: We’ll have to wait and see. The U.S. government has taken a very heavy-handed regulatory approach to blockchain. And it has dampened investment in the industry. Unfortunately, I see that continuing in 2020.

But here’s my first prediction for 2020: Even with excessive regulation, I believe at least one major corporation will launch its own digital asset within 2020. It will likely be a major technology corporation.

Facebook is a prime candidate. But I also think Amazon could pull it off. My longtime readers know I believe the company is preparing to launch an “Amazon Coin.” Customers could spend the Amazon coins on Amazon’s e-commerce platform. And, of course, the cryptocurrency would be convertible into other digital assets and fiat.

But the bottom line is that digital assets are here to stay. There’s no putting this genie back in the bottle.

Van: You mentioned that the U.S. is taking a very heavy-handed approach to cryptocurrencies. And you’ve said in the past that the U.S. isn’t keeping pace with countries like China when it comes to adopting digital assets. What do you think would change that?

Jeff: It’s going to take a serious wake-up call…

Readers probably know that I’m a member of the Chamber of Digital Commerce. We advocate for a light regulatory touch on the blockchain industry. I go to Washington from time to time to advocate for this cause.

And yes, I can tell you from personal experience that the U.S. has no sense of urgency when it comes to adopting this technology. I even confronted a senior D.C. staffer who claimed that major developments in the blockchain space wouldn’t happen for another three to seven years. And that the risk of capital flight was that far away as well.

China, on the other hand, is preparing to launch a digital version of the renminbi in the next few weeks. That’s my next prediction for 2020. I believe China will launch a digital version of its currency sometime next year.

Van: Could that serve as the wake-up call that the U.S. needs?

Jeff: I think so. The U.S. will watch the adoption of China’s cryptocurrency closely. If in the months after launch, the digital renminbi is widely adopted and used, then it will absolutely light a fire under the U.S. to do the same.

But this is the future we are headed toward. China will likely be the first to launch a digital version of its currency, but others will closely follow. The age of fiat currency is coming to an end.

We already have a plethora of private digital currencies in circulation. Next, we’ll see governments and large corporations get into the game. And large governments have the most to lose if they don’t make the transition.

We shouldn’t be surprised in the near future when physical bills disappear and our paychecks are deposited directly into a digital wallet. This trend is going to really kick off in 2020.

Van: Thanks as always for your insights, Jeff.

Jeff: Of course.

P.S. Van here again. As Jeff says, the money of the future will look very different from today. This could be the most significant change to money since the U.S. went off the gold standard. And, of course, there are profound investment implications for this.

Jeff has prepared his readers for this trend by recommending key blockchain tech companies. Remember, blockchain is the technology that supports cryptocurrencies. It’s a backdoor way to get exposure to this historical shift. Full details here.

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