Bitcoin Can Replace The Dollar As Global Reserve, Says Morgan Stanley Investment Chief
Bitcoin’s recent bullish run has been the main topic in the crypto ecosystem and the global financial markets. Analysts from large financial institutions are optimistic that the leading cryptocurrency is a potential replacement for the United States dollar as a global reserve currency.
According to Ruchir Sharma, the Chief Global Strategist and Head of Emerging Equity team at Morgan Stanley Investment Management, the dollar has remained the primary currency for instructional trades for many decades.
Although the Euro was a good contender, doubts about Europe’s multi-state government’s effectiveness led to the currency’s failure to gain trust as a global currency.
Due to its great strength, the US dollar has been the reserve currency for most Central Banks as savings and a base currency against other fiats.
Millennials Choose Bitcoin
Sharma wrote that the US Dollar stood firm against other fiat currencies at the coronavirus pandemic’s peak. As a result, the FED went on a money printing spree to combat the pandemic’s effect on economic activities. The move made “the country to keep running large deficits without apparent consequences.”
The government’s action propelled investors to look for ways to hedge their wealth against the impending inflation. And many, especially millennials, settled for Bitcoin because of its decentralized nature.
Since the pandemic, Bitcoin had seen a significant increase in mainstream adoption, and the asset is currently trading more than 4x its price in March when it crashed below $4,000.
A Warning To Government
According to Sharma, there’s more to Bitcoin’s bullish run than the digital rush. He said that even though the current surge is a short term spike, the increasing adoption of a trustless digital tender is a warning to world governments.
He also noted that the dollar could lose it’s reign as the global currency if financial transactions have a better alternative like bitcoin.
“Money printing is likely to continue, even when the pandemic passes. Trusted or not, bitcoin will gain from widening distrust in the traditional alternatives,” he wrote.
According to an earlier report, countries like Iran have already adopted Bitcoin as a medium of exchange for international trades. Also, smaller businesses are starting to embrace the cryptocurrency to have a presence in the global market. PayPal and Venmo have started storing Bitcoin to integrate it into their payment services for millions of merchants worldwide.