Cryptocurrencies Could Replace Gold – Bank of Singapore Says

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.

January 26, 2021 | AtoZ Markets – Cryptocurrencies are unlikely to replace fiat currencies as money, but may take a share in the market for reliable assets such as gold. This view was presented by Mansoor Mohi-uddin, chief economist at Bank of Singapore.

Cryptocurrencies Need To Overcome A Number Of Hurdles To Replace Gold

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.

In the view of the chief economist of the Bank of Singapore, a more realistic scenario looks in which Bitcoin will become an “electronic store of value,” replacing gold as its physical embodiment.

According to Mohi-uddin, to implement this scenario, Bitcoin will have to earn a greater level of trust, reduce volatility and gain approval from the authorities.

The researcher expressed optimism about the appointment of Gary Gensler as the chairman of the US Securities and Exchange Commission (SEC). He believes that this will increase the chances of launching a Bitcoin ETF.

“The industry will receive a trustworthy, reliable investment instrument. It will expand the number of investors, improve liquidity, reduce volatility and help cope with reputational risks,” he explained.

Recall that the investment company VanEck has filed a new application for the registration of Bitcoin ETF.

Read also: SolidX Sues VanEck Claiming Bitcoin ETF Plagiarism

JPMorgan strategists believe that the approval of a Bitcoin ETF in the United States will negatively affect the price of the first cryptocurrency in the short term.

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