The Bank of Singapore said Bitcoin and altcoins are capable of replacing gold as a store of value. The bank said that over time, the crypto market would eventually provide a new electronic measure for storing value, relegating gold.
Speaking to The National News, the Bank of Singapore’s chief economist, Mansoor Mohi-uddin, said that new cryptocurrencies would need to prove their worth as stores of value. He added:
“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.”
The chief economist referred to Bitcoin’s performance over the past year. He mentioned how Bitcoin rebounded after its mid-March crash, reaching an all-time high to later decline shortly after. In 2020, Bitcoin grew significantly as a result of an increase in its demand and rise in individual and institutional investors.
Mohiuddin doubts the possibility that digital assets would replace fiat currencies. He said:
“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.”
During the first crypto session on the Davos Agenda, the Bank of England governor Andrew Bailey said no digital assets would work as a means of payment in the long term. Like Mohi-uddin, Bailey also condemned the volatile nature of digital assets.
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