The global payment system is expected to undergo significant changes in the coming years, with Stan Druckenmiller predicting that it will be running on blockchain within the next decade and a half.
However, a recent working paper from the Bank for International Settlements has raised concerns about the potential impact of decentralization on the monetary landscape. The paper argues that decentralization could lead to fragmentation, as different blockchains develop their own consensus mechanisms and user bases become splintered across multiple platforms.
The authors of the paper note that this is already happening in the stablecoin market, where multiple chains are competing for dominance. While this has led to increased efficiency and lower fees for users, it also creates a problem for policymakers who need to regulate and maintain control over the system.