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Bank of Singapore Says Crypto Could Replace Gold as Store of Value

Cryptocurrencies need to overcome a number of hurdles first, though, according to a research note.

Jan 25, 2021 at 1:49 p.m. UTC
Updated Sep 14, 2021 at 11:00 a.m. UTC

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.

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