Bitcoin has now experienced its third halving event, which sees the reward for adding new transactions to the blockchain reduce from 12.5 coins to 6.25. There are high hopes that this reduction in supply will lead to another cryptocurrency bull market, the last of which famously saw the price of bitcoin mushroom to nearly $20,000 in December 2017.

Such a surge would differ from that of 2017 in several ways, most notably given the current volatile economic climate as central banks pump huge amounts of money into financial systems to help keep businesses afloat amidst the Covid-19 lockdown. This will bring to the fore the potentials of bitcoin as an inflationary hedge as investors seek exposure to cryptocurrency to balance this risk in their portfolios.

More broadly, however, the wider blockchain industry is altogether more mature than it was in 2017, with financial services firms now exploring the possibilities of distributed ledger technology on numerous fronts.

Added to this, technology giants such as Microsoft and IBM have also been launching blockchain-based services, while Facebook brought renewed attention to the world of digital currencies last year with the announcement of its controversial Libra project.

While much criticised at the outset and subsequently watered down to appease regulators, Libra has also triggered discussion around central bank digital currencies (CBDCs) with almost every major central bank announcing their attention to explore the possibilities of these.

Among the numerous benefits to CBDCs, the most oft-repeated is addressing the decline in the use of cash, something which has accelerated this year with more shopping taking place online and bricks-and-mortar retailers ceasing to accept paper money.

According to a recent report by campaign group Positive Money the disappearance of cash would lead to an essential privitisation of money with commercial banks holding an oligopoly over digital money and payment systems.

Such a situation would also prove damaging for the unbanked population, which still totals an estimated 1.7 billion people worldwide. While these people do not have access to the current financial systems due to not being able to prove their identities, they could use digital currencies provided they have a mobile phone and an internet connection.

The role of blockchain in the above developments remains subject to some question and it is likely that there will be much discussion in the finance and technology industries in the near future around this.

Read about these and other use cases for blockchain technology, such as identity and trading, in Finextra's The Future of Blockchain 2020 report. Click here to download.