thecoinrepublic.com
- 1 Peel, from Morgan Stanley, has recently made a comment on the reduction in the dominance of USD.
- 2 He said that the development of CBDC and Bitcoin can negatively affect USD.
- 3 Around 130 countries are currently working on developing CBDC, which will enhance the adoption of cryptocurrency including Bitcoin.
Morgan Stanley, a banking giant based in the USA, has recently shared that Central Bank Digital Currencies (CBDC) have the potential to contribute to shifting payment modes away from US dollar dominance.
It could be shifted to digital currencies, including cryptocurrencies. With the approval of the BTC ETF, it is highly anticipated that it will gain increased adoption as a mode of payment.
Expectations and Statements of Morgan Stanley Executive Director
Andrew Peel, executive director and head of the digital asset market at Morgan Stanley, stated,
“As CBDCs become more widely adopted and technologically advanced, they hold the potential to establish a unified standard for cross-border payments, which could diminish the reliance on traditional intermediaries like SWIFT and the use of dominant currencies such as the dollar.
Furthermore, CBDCs can enable significant innovation in financial services, such as the use of smart contracts for automating payments, making the concept of programmable money a practical reality.”
The above statement emphasizes the potential of cryptocurrencies to facilitate and create a new standard for cross-border payments. It will reduce the need for the dollar and other traditional payment structures and currencies.
Analysts from the Bank also believe that USD-pegged stablecoins are capable of making a significant impact on the global financial sector. Moreover, it has the potential to restructure money transfers across borders.
Impact of Stable Coins
Besides, Peel also suggests that stablecoins can act as killers in the currency space, increasing the reach of cryptocurrencies.
“Rather than challenge the dollar’s dominance, their continued evolution and growing acceptance by mainstream financial entities underscore their potential to significantly alter the landscape of global finance and in fact reinforce the dollar as the dominant global currency…
As the world adjusts to these technological advancements, understanding the interplay and nuances between traditional fiat currencies, Bitcoin, e-money, and stablecoins becomes crucial. This dynamic is set to significantly influence the future of international trade and finance, potentially reshaping the global economic and financial landscape.”
With this, he points out the global adoption of cryptocurrencies in the last 15 years since its development and provides a foundation for continual growth. As per the current data, more than 100 million people around the world hold Bitcoin, and Bitcoin ATMs are established in more than 80 countries.
Moreover, CBDCs in other countries are also supporting the growth of digital currencies. It would support cross-border transactions without involving USD.
Conclusion: CBDC from Other Countries
Stats from the CBDC tracker suggest that 130 countries, representing 98% of the global GDP are exploring or developing CBDCs, marking a significant increase in just a few years.
CBDCs can bring innovation to all segments of financial services, including the use of smart contracts for automating payments. It will practically imply the concept of programmable money.
Bitcoin and CBDC can collectively reduce the dominance of the USD. Peel comments that stablecoins can prove to be a helpful addition to global finance.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.