DBS Holdings CEO Piyush Gupta said in the DBS Bank’s annual report issued on Wednesday that one may use private digital tokens (like Bitcoin) as wealth since they can be stored, retrieved, and traded at a later point in time, just like gold. However, he believes that these tokens will never replace government-backed currency. He remarked about cryptocurrencies in view of political and regulatory perspective that regulators, as well as politicians, would be hesitant to hand over control on monetary policy and economic control systems. Therefore, they will be apprehensive in allowing private money to flourish.
Money must have three essential elements as a unit of account, medium of exchange, and store of value. According to Gupta, private-issued coins struggle to achieve the first two of these elements due to lack of universality, lack of confidence in the issuer, and high fluctuation in value.
He believes that central bank digital currencies (CBDCs) will become more popular. Currently, 85 percent of the world’s central banks are researching or piloting it. China, the United States, Russia, Brazil, and Australia, among other countries, are already experimenting with, investigating, and implementing CBDC initiatives.
In partnership with the Monetary Authority of Singapore, DBS is also engaging in the arena of CBDC.
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