Digital assets in the future could settle into the status of a store of value and become a competitor to gold. This view was presented by Mansur Mohi-ud-din, the Bank of Singapore’s chief economist.
Cryptocurrencies may partially displace gold by offering an electronic, rather than physical, store of value. However, important hurdles such as trust, volatility, regulatory acceptance and reputational risks still need to be addressed. https://t.co/20XQZLAGw2 pic.twitter.com/pQpTUSR5sJ
— Bank of Singapore (@bankofSG) January 23, 2021
The expert believes that, once regulatory hurdles are overcome, cryptocurrencies could also begin to compete with fiat money as a means of exchange and a unit of account. However, the chances of success are slim.
In the Bank of Singapore’s chief economist’s view, a more realistic scenario is one in which Bitcoin becomes a “electronic store of value”, displacing gold as its physical embodiment.
According to Mohi-ud-din, to realise this scenario the first cryptocurrency must earn greater trust, reduce volatility, and gain regulatory approval.
The researcher expressed optimism about the appointment of Gary Gensler as head of the U.S. Securities and Exchange Commission. He believes this will boost the prospects for launching a Bitcoin ETF.
“The industry will gain a trustworthy, reliable investment instrument. It will expand the number of investors, improve liquidity, reduce volatility, and help address reputational risks,” he explained.
Earlier, VanEck filed a new application to register a bitcoin ETF.
The JPMorgan strategists believe that the approval of a Bitcoin ETF in the United States in the near term would negatively affect the price of the leading cryptocurrency.
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