Bitcoin and CBDCs Could Challenge the Dollar, says Morgan Stanley
According to experts at Morgan Stanley, Bitcoin (BTC) and central bank digital currencies (CBDCs) have the potential to challenge the dominance of the US dollar. In a recent report, analysts suggest that BTC could surpass the dollar as a global currency, which currently accounts for about 60% of international foreign exchange reserves.
Rise of Bitcoin
Morgan Stanley’s head of digital assets, Andrew Peel, points out that the approval of spot Bitcoin ETFs by the SEC in the US has accelerated this shift. The inflows into new products have already exceeded $1.18 billion weekly. Additionally, BTC has experienced consistent growth over the past 15 years and currently has 106 million owners worldwide. The presence of Bitcoin ATMs in over 80 countries further demonstrates its widespread adoption.
The Impact of CBDCs
While Bitcoin poses a challenge to the dollar’s dominance, CBDCs from other countries can also play a role in diminishing its power. These digital currencies have the potential to establish a unified standard for cross-border payments, reducing reliance on traditional intermediaries like SWIFT and dominant currencies like the dollar.
“[CBDCs] hold the potential to establish a unified standard for cross-border payments, which could diminish the reliance on traditional intermediaries like SWIFT and the use of dominant currencies such as the dollar.”
Morgan Stanley’s report
Bitcoin’s Dominance
Currently, Bitcoin holds nearly 49% of the cryptocurrency market share, according to Block Research. In November 2023, it reached a share of over 51.4%, highlighting its significant role in the market and its influence on altcoins and overall market sentiment.
Hot Take: The Future of Global Currencies
As Bitcoin continues to grow in popularity and CBDCs emerge as potential game-changers, the dominance of the US dollar as a global currency could face serious challenges. The rise of Bitcoin, along with the potential of CBDCs to revolutionize cross-border payments, has the power to reshape the global financial landscape. While it remains to be seen how these developments will unfold, it is clear that both Bitcoin and CBDCs are forces to be reckoned with in the world of currencies.
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