CBDCs promise fast and cheap, transactions. But they won’t threaten crypto according to a recent report by Morgan Stanley
Although central banks are pushing the gas pedal in their race against decentralized technologies, it is very difficult for their CBDCs to really threaten cryptocurrencies. At least, this was the conclusion reached by banking giant Morgan Stanley.
Analysts at Morgan Stanley believe that while CBDCs may affect cryptocurrency markets as they enter the space, they are unlikely to be a threat to decentralized technologies. Digital, decentralized assets have other use cases that make them more appealing to investors and enthusiasts.
Different Products Don’t Compete With Each Other
According to statements by Morgan Stanley’s chief economist Chetan Ahya, the bank’s experts believe that decentralization has already permeated the mindset of many investors, and CBDCs cannot compete against crypto in many aspects precisely because of their decentralized and flexible nature:
“Cryptocurrencies will still exist, as they continue to serve other use cases. For instance, some cryptocurrencies can function as a store of value… as some segments of the public do not place their full faith in fiat currencies.”
Banks have mixed views regarding crypto. On the one hand, certain banks such as HSBC applied an anti-cryptocurrency policy (HSCBC started censoring certain transactions associated with the purchase and sale of digital tokens). On the other hand, banks like BNY Mellon announced services for cryptocurrency traders and hodlers, adapting to the new times.
Morgan Stanley believes that the innovators will win out in the end. The report explains that current macroeconomic conditions have led to massive interest in cryptocurrencies:
“Investors’ interest in cryptocurrencies has risen alongside the unprecedented monetary and fiscal policy response to the pandemic”
Read more: https://cryptopotato.com/cbdcs-wont-threaten-crypto-morgan-stanley-reports/
