Cryptocurrencies to grow as store of value like gold, says top global bank's CEO | Mint
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Business News/ Markets / Cryptocurrency/  Cryptocurrencies to grow as store of value like gold, says top global bank's CEO
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Cryptocurrencies to grow as store of value like gold, says top global bank's CEO

Gupta does not see privately-issued digital coins (e.g. Bitcoin) taking over the role of state-backed money

cryptocurrency bitcoin's representation (AFP)Premium
cryptocurrency bitcoin's representation (AFP)

Singapore-based DBS Holdings Group Ltd's Chief Executive Officer (CEO) Piyush Gupta thinks that private digital coins like Bitcoin will continue to grow as a meaningful store of value, in a similar vein to gold. Nonetheless, it’s unlikely that cryptocurrencies will take over the role of state-backed money, he said in the bank’s annual report released on Wednesday.

"I also expect that regulators (and politicians) will be loath to give up control of monetary policy and economic management tools, and will therefore be very circumspect about letting private money grow. Having said this, I do think that private money (crypto) will continue to grow as a meaningful store of value, much like gold is today," he said.

The global bank's chief does not see privately-issued digital coins (e.g. Bitcoin) taking over the role of state-backed money. “The reason for this is that money needs to have three attributes: be a unit of account, a medium of exchange and a store of value. Privately-issued coins find it hard to attain the first two of these," he explained.

Privately-issued coins find it hard to attain the first two of these, according to Gupta, as reasons include a lack of ubiquity, absence of faith in the “issuer", and large volatility in value, among others.

While the technology used to issue these coins (blockchain) is indeed very powerful, and does form a basis for creating immutability and transparency, he added that the truth is that it will still be a while before the common man will universally accept this when it comes to regular monetary transactions.

Meantime, Gupta said central bank digital currencies will become more common place and there’s a need to “stay close to these developments." Since 85% of central banks in the world are either currently studying or piloting it, the “direction of travel seems clear", he said. DBS is participating in industry sandboxes and experimenting with the technology, Gupta added.

 

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Published: 09 Mar 2022, 12:29 PM IST
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