The latest report from Goldman Sachs endorses Cryptocurrency as money alternative. Bitcoin might be the solution to some of the economic issues in a number of countries.
11 January, AtoZForex – The recent report by the US banking giant Goldman Sachs has stressed the role of Bitcoin and other cryptocurrencies in the modern world. The analysts with Goldman Sachs believe that digital currencies have the potential to serve as an alternative form of money in struggling economies.
Goldman Sachs Endorses Cryptocurrency as Money Alternative
The report has been issued this Wednesday, and two Goldman Sachs strategists were working on it – Zach Pandl and Charles Himmelberg. The report has outlined the US dollar’s usage by other nations. The analysts argued that this fact implies that there is a demand for a store of value and medium of exchange that can be used throughout the entire globe.
According to the report, dollar’s role, in this case, is significant – yet, it may not be the best option in all cases. The Goldman Sachs employees stated:
“In those countries and corners of the financial system where the traditional services of money are inadequately supplied, bitcoin (and cryptocurrencies more generally) may offer viable alternatives.”
Is national cryptocurrency the way to go?
Yet, cryptocurrencies, as they are right now, would not specifically be suitable for this purpose. The report mentions the volatile nature of cryptocurrencies, which may pose some obstacles. Pandla nd Himmelberg wrote:
“Our working assumption is that long-run cryptocurrency returns should be equal to (or slightly below) growth in global real output—a number in the low single digits.”
Government-issued cryptocurrencies should be perceived as assets that are similar to gold or other metals in order to be viable. However, not a single country has successfully launched its own cryptocurrency yet. Nevertheless, some governments have been making some steps in the development of this idea.
Among the latest attempts to establish the national cryptocurrency, we can note Venezuela’s President Nicolas Maduro’s announcement from last month. He has stated that the country is planning to create its own token to improve its economic situation. Yet, authorities in the country, along with the national legislature, have expressed a wave of criticism in relation to this initiative.
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