Cryptocurrencies such as Bitcoin will continue to rise as a valuable store of value, just like gold, Piyush Gupta, the chief executive officer(CEO) at DBS Bank says. He does not believe, however, that cryptocurrencies will take over the role of a government-backed currency.
Piyush Gupta of DBS sees cryptocurrency as a store of value.
DBS Holdings CEO Piyush Gupta said in the DBS Bank’s annual report released on Wednesday that private digital coinage like Bitcoin can be used as a store of value because they can be preserved, retrieved, and exchanged at later time, just like gold.
Regarding the regulatory and political approach, he said:
“Regulators and politicians will be reluctant to give up control of monetary policy and economic management tools, and will therefore be very cautious about letting private money grow. Having said this, I do think that private money (crypto) will continue to grow as a meaningful store of value, much like gold is today.”
The global bank’s chief does not believe privately issued digital coins will take over the role of state backed money.
“The reason for this is that money needs to have three attributes: be a unit of account, a medium of exchange and a store of value. Privately-issued coins find it hard to attain the first two of these,” he explained.
Private-issued coins struggle to achieve the first two of these, according to Gupta due to a lack of ubiquity, lack of faith in the issuer, and high fluctuation in value, among other factors.
CBDCs Set To Grow In Popularity
Furthermore, Gupta believes that central bank digital currencies (CBDCs) will become more popular and that it is important to keep up with these changes. The path of travel is clear, given that 85 percent of the world’s central banks are either studying or piloting it.
In collaboration with the Monetary Authority of Singapore, DBS is participating in industry sandboxes and experimenting with the central bank digital currency, Gupta added.
China, the United States, Russia, Brazil, and Australia, among other countries, are already experimenting with, studying, and implementing CBDC initiatives.