Pandemic Will Speed Bitcoin Adoption, Says DBS Bank Economist
“A pandemic-led acceleration of adoption.”
That’s how Singapore-based DBS Bank describes the current state of digital assets in its quarterly report on cryptocurrencies published in August.
It’s interesting to hear such an observation from a respected multinational bank and its chief economist, Taimur Baig.
However, there have lately been murmurings about certain large financial institutions particularly in places like Singapore, Switzerland and Germany fielding a new wave of demand for crypto, filtering through from smaller private banks and wealthy clients.
On the subject of cryptocurrencies like bitcoin (BTC), Baig identified two distinct phases of demand: pre-pandemic and post-pandemic.
“Pre-pandemic demand was largely speculative. People saw bitcoin had a spectacular run and wanted to be part of that game, so what’s wrong with putting in 1% of assets under management [into BTC],” Baig said in an interview.
“But I think post-pandemic is beyond speculative. It’s more about, ‘This thing has fixed circulation, it will not be debased.’ People are worried about dollar outflow and wondering if they should hold crypto in addition to gold as a safe-haven currency.”
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DBS isn’t the only bank to notice this trend. Singapore-based digital asset bank Sygnum, which holds a banking license from the Swiss Financial Market Supervisory Authority, echoed this view.
“Since the outbreak of COVID-19 there has been increased interest from family offices and private individuals who see digital assets as an alternative and a way to protect against a worrying inflation risk,” said Martin Burgherr, co-head of clients at Sygnum Bank. “Now that banks are awakening from the lockdown, we have had a significant uptick in national and international banks asking us to help in a B2B setup, to enable their clients to invest in digital assets.”
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