Specialists of the largest bank in Singapore believe that one should not expect a revolution from digital assets because central banks have already become more active in this area. The banks are afraid to lose control over the financial system.
Central banks are simultaneously “worried and intrigued” by the growing role of digital assets in today’s world, especially during the COVID–19 pandemic. Their skepticism explains why the monetary authorities have long ignored the area, in which private companies have excelled. However, now they are looking at how to catch up. This is stated in the report of the largest financial holding in Singapore – DBS Bank.
The report tried to assess the impact of digital money on the financial landscape and its role in the financial system of the future. Since most of the major cryptocurrencies have been around for more than ten years, DBS believes that it is time to make some conclusions.
For a long time, central banks have regarded cryptocurrency solely as a speculative asset that can hardly be used in real life. However, now Bitcoin and other cryptocurrencies have literally become “the spirit of the times for investors.” This is proved by the statements of rather conservative investors and the growing demand for cryptocurrency among institutions.
DBS believes that the coronavirus pandemic and the measures taken by central banks to offset the effects of the crisis have only highlighted the merits of digital assets and accelerated development in the industry.
Investors consider Bitcoin a “safe haven“, which will allow not only to preserve but also to increase assets. They are also attracted by the fact that Bitcoin’s supply is algorithmically limited to 21 million tokens, making its offer final.
However, cryptocurrency has long ceased to be an exclusive investment instrument. A DBS survey shows that 35% of cryptocurrency holders use it for payments and online purchases. At the same time, less than 25% of respondents are interested in cryptocurrency as a technology or tool for short–term and long–term investments.