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Economic Viewpoint

Despite the Downsides of a Number of Cryptocurrencies, the Underlying Technology Continues to Show Its Potential

July 19, 2018
François Dupuis, Vice-President and Chief Economist • Hendrix Vachon, Senior Economist

Cryptocurrencies continue to evolve rapidly and largely go beyond the scope of just Bitcoin, which has made headlines on a regular basis in recent years. There are now more than 1,600 cryptocurrencies in circulation, around 10 times more than the number of national currencies.

Following a surge in many of their prices last year, major corrections were observed. This still-elusive asset class is plagued by many issues. That said, the underlying technology remains promising for facilitating and reducing the cost of many types of transactions. Even central banks are exploring its potential. Here we refer to Distributed Ledger Technology. It consists of virtual ledgers shared simultaneously between many computers around the world, enabling transactions to be validated in a decentralized manner.