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Morgan Stanley, a major player in the financial sector, suggests that the advent of central bank digital currencies (CBDCs) might usher in a departure from the current supremacy of the US dollar.
According to insights from Andrew Peel, the Executive Director and leader of Digital Asset Markets at the institution, CBDCs hold the potential to redefine the landscape of cross-border payments. This potential shift could lessen reliance on established channels such as SWIFT and customary currencies like the dollar.
Peel points out that as CBDCs gain broader acceptance and progress in technological sophistication, they could establish a new standard for cross-border transactions. This could, in turn, decrease dependence on traditional intermediaries like SWIFT and widely-used currencies such as the dollar.
In addition, Peel emphasizes the transformative impact of CBDCs on financial services, opening avenues for innovation. For instance, the integration of smart contracts for automated payments could become a tangible reality, representing a shift toward programmable money.
On a different note, Peel also examines the influence of stablecoins pegged to the US dollar. He suggests that these stablecoins are positioned to have a substantial impact on the global financial sector, potentially altering the conventional methods of money transfer across borders. Peel considers stablecoins as a potential game-changer within the realm of cryptocurrencies.
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Contrary to directly challenging the dominance of the dollar, Peel argues that the ongoing evolution and increasing acceptance of stablecoins by mainstream financial entities underscore their potential to reshape the global financial landscape. This evolution may even reinforce the dollar’s role as the primary global currency.
In the face of these technological advancements, Peel underscores the importance of comprehending the intricate relationships between traditional fiat currencies, Bitcoin, e-money, and stablecoins. This evolving dynamic is poised to play a crucial role in shaping the future of international trade and finance, potentially restructuring the global economic and financial framework.