Citi Bank Says Bitcoin May Become The Currency For Global Trade

In a 108 page report titled ‘Bitcoin at The Tipping Point,’ CitiBank states that Bitcoin may become central to global trade in the future. The prediction is due to the currency’s decentralized design and other features, which puts it in a perfect position to become a global trade currency.

Citi claims that cryptocurrencies have grown from being “primarily a retail-focused endeavor to something that looks attractive for institutional investors.” The search for higher returns and substitute assets contributes to this growth. The bank’s analysts have speculated that a boost in other Bitcoin-like products like stablecoins and digital currencies would make the crypto world more legitimate. The increase will also make the products easier to use and incorporate into economies.

The report says that the original focus was to find a new way to avoid double spend, and offer new payment types for accounts. But with 35% of U.S. businesses accepting Bitcoin, the focus shifted to sponsorship resistance and finding a way to store value for the currency.

Although relatively small, Bitcoin’s role in international trade is the currency’s biggest strength and drive from a fundamental perspective. The currency’s role is what puts a floor on its price and leads to constant demand that is not affected by price movements. 

Citi says,

“A decentralized cryptocurrency might be preferred as no government or outside entity can take steps that might affect the supply of the trade currency, helping to decouple trade from political considerations.”

Although the U.S. dollar is the current default trade currency, there are growing tensions between China and the U.S. concerning the future. Seeing as Bitcoin is the most well-established cryptocurrency, it is the likely beneficiary of a shift to a new global trade. 

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