Many central banks around the world are making steady strides towards proprietary digital currencies (CBDCs) in recent months. That trend has been celebrated in the crypto ecosystem for representing a major financial modernization, but it has worried more than one analyst about the risk it can pose for “traditional” crypto currencies. For the experts of the American bank Morgan Stanley, there is no such danger.
The emergence of central bank digital currencies in the financial system would undoubtedly bring a breakthrough in terms of speed and profitability for business transactions, but crypto currencies would continue to attract investors thanks to their main feature: decentralization.
Chetan Ahya, chief economist at Morgan Stanley, explained that the growth of crypto currencies in terms of profitability and adoption has made many investors familiar with decentralization. The existence of an entity behind the CBDCs would slow down their advance on assets such as Bitcoin (BTC), Ethereum (ETH) and others.
“The criptomonedas continue to exist, as they continue to serve other cases of use”, Ahya said. And he added: “Some crypto currencies can function as a store of value, as some segments of the public do not put all their faith in fiat currencies.”
Monitoring of operations by a central bank and its ability to control or censorship users are the main characteristics by which Morgan Stanley team believes that the CBDC not eliminate interest in criptomonedas.
The bank’s optics marks a break in the position of similar entities: pro and anti crypto. In particular, Morgan Stanley believes that, driven by financial innovation, the former will end up prevailing in the system.
Ahya, in particular, pointed out that part of the growth of crypto currencies in recent times was a consequence of inefficient policies to face the economic crisis unleashed since the spread of the corona virus. “Investor interest in crypto currencies has increased along with the unprecedented fiscal and monetary policy response to the pandemic, ” the businessman said.