Morgan Stanley's head of digital assets, Andrew Peel, has issued a significant warning about the future of the US dollar's dominance in the global market. He asserts that Bitcoin's exceptional growth and the emergence of central bank digital currencies (CBDCs) could potentially disrupt the longstanding supremacy of the US dollar.
Currently, the US dollar accounts for approximately 60% of global foreign exchange reserves. However, Peel notes that a "paradigm shift" in the global perception and use of digital assets, particularly Bitcoin and CBDCs, could challenge this dominance. The recent approval of a series of spot Bitcoin ETFs in the United States, which attracted weekly inflows exceeding $1.18 billion, is seen as a catalyst for this shift.
Bitcoin's remarkable global adoption over the past 15 years further substantiates its growing influence. With over 106 million people worldwide holding the cryptocurrency and the presence of Bitcoin ATMs in more than 80 countries, its continual growth is evident.
Peel also points to the potential impact of CBDCs in reshaping global finance. These digital currencies, currently being explored or developed by 130 countries representing over 98% of the global GDP, could establish a unified standard for cross-border payments. This development might reduce reliance on traditional intermediaries like SWIFT and dominant currencies such as the US dollar.
CBDCs also promise significant innovation in financial services, including the use of smart contracts for automating payments, thus making the concept of programmable money a practical reality.
While acknowledging the influential role of Bitcoin and CBDCs, Peel recognizes that stablecoins, particularly those backed by the dollar, could have a profound impact on the financial sector. He describes these stablecoins as the "killer app" of crypto, potentially reshaping how money moves across borders.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.