Can Bitcoin replace the dollar? Many analysts believe that no and that traditional money as we know it will always exist. However, Morgan Stanley noted that both Bitcoin (BTC) and central bank digital currencies (CBDC) could threaten the dollar’s dominance as the world’s leading currency.
According to a recent report by the American investment bank, a “paradigm shift in the global perception and use of digital assets” It could endanger the hegemony of the US currency, which represents around 60% of international currency reserves.
The head of digital assets Morgan Stanley, Andrew Peel points out that this change was accelerated with the approval by the Securities and Exchange Commission (SEC) from a list of exchange-traded funds (ETF) of spot bitcoin in the United States, with weekly entries in new products exceeding US$1.18 billion.
The growth of Bitcoin, one of the factors
Likewise, Peel indicated that Bitcoin experienced a constant and “remarkable” growth in the last 15 years, Well, 106 million people around the world own this cryptocurrency and there are bitcoin ATMs in more than 80 countries.
In November of last year, bitcoin’s market share or dominance in the cryptocurrency market exceeded 51%, one of the highest figures in recent years. In recent weeks, the fall of the crypto asset and the rises in other alternative currencies has reduced this percentage to just under 50%.
How CBDCs can affect the dollar
Likewise, the Morgan Stanley expert believes that CBDCs from other countries could also affect the domain of the American dollarsince they would make it possible to make quick cross-border payments without the need for a common currency like the dollar.
“CBDCs have the potential to establish a unified standard for cross-border payments, which could reduce reliance on traditional intermediaries like SWIFT and the use of dominant currencies like the dollar,” Peel explained.
“In addition, the CBDCs can enable innovation in financial services, such as the use of smart contracts to automate payments, turning the concept of programmable money into a practical reality,” he added.
On the other hand, Morgan Stanley has also highlighted that the ‘stablecoins’ or stable currencies They could prove a more than useful addition to global finance. “With their increasing importance, ‘stablecoins’ backed by the dollar are set to have a profound impact on the financial sector, potentially reshaping the way money moves across borders,” they say.
Source: Ambito
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