Cryptocurrency adoption, in some recent years, spiked to an unprecedented level and the crypto community is growing at an exponential rate. The awareness about the digital currency, at a wider level, increases the concerns of the governments.
In the start, most countries try to control the crypto adoption and even, ban the bitcoin for their citizens. Due to the underlying technology, blockchain, investors turned towards it while imagining its bright future.
Fintech companies applied the blockchain technology in their operations due to its striking features. Now, there are hundreds of companies and firms that are dealing with crypto and blockchain services.
Governments that consider cryptocurrency a threat to the global financial system, at the start, were not acclaiming it. The Financial Regulatory Authorities are now busy to deal with the outgrowing digital economy.
The Bank of Canada published a report in which it is revealed that 5% of the Canadians now own the digital assets and awareness about cryptocurrency surged in the past 2-3 years rapidly.
Public to Private Blockchain
The best way is to regulate the digital currency and the central banks are working to issue the state digital currencies. As we know, cryptocurrency works on the public ledger- means public blockchain. But the Central banks are narrowing the technology and making it private to monitor the users’ personal data.
The digital assets by the governments will run through private blockchains. In this way, the whole process will divert to centralization. The blockchain-based currency such as bitcoin was created to remove the third-party or central authority.
But the financial authorities of the countries are adding the third party to the process in the form of central banks. On the public ledger, the data is confirmed by the different validators and there is no chance of hacking at all.
In the case of private blockchain- as in the government-owned ledgers- the risk for the breaching of the data will be possible. Therefore, security-issue will be a problem in the future.
The report by the Bank of Canada also shows that government-designed ledgers will help to collect the consumers’ data easier than before. The data can deliver to other departments for the inspection of any user or customer.
With the emergence of the new state digital assets, the security of the personal information will be a new issue.