Cryptocurrencies are considered a store of value by an increasing number of investors.
Piyush Gupta, the chief executive officer (CEO) at DBS Bank, is confident that cryptocurrencies like Bitcoin will continue to gain adoption as a store of value. He likened the cryptocurrency to gold and believes Bitcoin’s status will increase over the coming years.
Gupta made this known during an interview with Bloomberg. However, Gupta stated that he doesn’t think cryptocurrencies will take over from government-issued fiat currencies. 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.”
Bitcoin’s actual use case has been a topic of debate over the past few years. According to some industry participants, Bitcoin is a currency, while others believe that the leading cryptocurrency is a store of value.
Gupta added that he thinks it would be really tough for cryptocurrencies to replace the traditional fiat currencies. He said;
“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.”
According to Gupta, cryptocurrencies find it hard to attain the first two of these due to the lack of broader faith in the market at the moment and the extreme volatility of Bitcoin and the other leading cryptocurrencies.
Central banks worldwide are developing central bank digital currencies (CBDCs), and Gupta is confident that they will become relevant over the coming years. As such, he advised industry participants to stay close to the developments of CBDCs.