How Viable Is Cryptocurrency?

Managing director of Alvarez & Marsal’s Dubai office, Saeeda Jaffar, discusses the potential of cryptocurrency to become a viable means of transacting

How seriously should we take the rise of cryptocurrency? Is it a serious rival to traditional currency?

“There are different views about cryptocurrency – all the way from ‘it will replace everything’ to ‘it’s nothing but a Ponzi scheme’. The reality, however, is more nuanced.

“For example, blockchain technology does provide a great way to remove the middle man in financial transactions, as well as strengthen security, so it should not be discounted as a fad or as a threat. More generally, though, the echoes with the dotcom era are very strong. When knowledge of the internet first moved outside a few academics and defence contractors into public consciousness in the 1990s, the result was a boom not dissimilar to what we are currently seeing today. This has been driven by companies, investment banks, advisers, the media and investors themselves.

“All had unrealistic expectations as to the value that the internet would or could deliver and the speed at which it might happen. Yet today, the internet has become mainstream, a part of everyday life and without it most people would find it difficult to work or be entertained. In other words, it has matured.