Bank of Singapore Says Crypto Could Replace Gold as Store of Value
Bank of Singapore, a private banking arm of OCBC Bank, has said cryptocurrencies have the potential to partially replace gold as a store of value.
Before that can happen, though, cryptocurrencies must overcome hurdles including high volatility, regulatory acceptance and reputational risks, according to a research note from the bank reported by The National News on Sunday.
“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,” wrote Mansoor Mohi-uddin, chief economist at Bank of Singapore.
If the issues can be addressed, bitcoin could have a place in investors’ portfolios as a potential safe-haven asset and means to diversify assets, he said.
Cryptocurrencies offer the benefit that they are easy to move and store when compared with precious metals, though they are also prone to theft via hacking, per the note.
Mohi-uddin doesn’t see cryptos replacing fiat currencies, however, as he considers them an inefficient unit of exchange.
“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,” he added.
Read more: Singapore Exchange, Temasek Launch Digital Asset Business for Capital Markets
