Bank of Singapore Says Crypto Could Replace Gold as Store of Value
Cryptocurrencies need to overcome a number of hurdles first, though, according to a research note.
Bank of Singapore Says Crypto Could Replace Gold as Store of Value
Bank of Singapore, a private banking arm of OCBC Bank, has said cryptocurrencies have the potential to partially replace gold as a store of value.
- Before that can happen, though, cryptocurrencies must overcome hurdles including high volatility, regulatory acceptance and reputational risks, according to a research note from the bank reported by The National News on Sunday.
- “First, investors need trustworthy institutions to be able to hold digital currencies securely. Second, liquidity needs to improve significantly to reduce volatility to manageable levels,” wrote Mansoor Mohi-uddin, chief economist at Bank of Singapore.
- If the issues can be addressed, bitcoin could have a place in investors’ portfolios as a potential safe-haven asset and means to diversify assets, he said.
- Cryptocurrencies offer the benefit that they are easy to move and store when compared with precious metals, though they are also prone to theft via hacking, per the note.
- Mohi-uddin doesn’t see cryptos replacing fiat currencies, however, as he considers them an inefficient unit of exchange.
- “Governments are very wary of any technology that could potentially displace national currencies. This would reduce the ability of policymakers to print money during economic crises,” he added.
