DBS Bank executive bullish on crypto
Yet another big executive from a traditional financial institution has come out in support of cryptocurrencies. Piyush Gupta, CEO of DBS Bank, Singapore’s and Southeast Asia’s biggest commercial bank, recently stated that he anticipated Bitcoin growing as a store of value in the future. Similar to traditional stores of value like gold, Gupta expects crypto assets to settle on storing wealth as their core use case.
However, until that happens, Gupta expects more difficulties for crypto on the way. The bank’s annual report notes that cryptocurrencies would not replace traditional fiat currencies due to lack of ubiquity, persistent volatility, and lack of faith in issuing institutions. Furthermore, crypto is in for a massive pushback from established institutions, as those do not have interest whatsoever in relinquishing control over the economic and monetary system. Gupta concludes that the technology would continue growing, but such growth would only be allowed to happen in “safe” areas like a store of value – crypto would eventually follow the role that gold has in today’s financial system.
One reason for this is the technological and ideological superiority of CBDCs to cryptocurrencies. Gupta notes that 85% of central banks worldwide are “studying and/or piloting CBDCs,” implying that legacy finance has the interest and the capabilities to push centralised digital assets over their decentralised counterparts. Several countries like Nigeria have already launched digital currencies, and we can reasonably expect many more to follow in their footsteps soon. However, how well those will be received in financially and technologically advanced Western countries is unclear.
DBS pushes crypto business
In a testament to crypto’s growing punching power, DBS also continues to expand its digital assets business. It became Southeast Asia’s first bank to launch an in-house crypto exchange. In its latest earnings report, the bank also revealed that trading volume in cryptocurrencies had grown to $806 million AUD in Q4 2021, a more than 100% increase over the first nine months of the year. DBS turned over $1.1 billion AUD in crypto assets in 2021.
As a result, the bank plans to expand its crypto exchange service to retail clients in 2022 and install a 24/7 crypto trading self-service. Doing so would follow in the footsteps of other Asian banks like Thailand’s Siam Commercial Bank and Union Bank of the Philippines, which both provide crypto exchange services.
Even if it becomes adopted as a significant store of value, Bitcoin may not reach the hyper-bullish $1 million price prediction. But Mr. Gupta is likely correct in his assessment that cryptocurrencies are here to stay as a “hard money” asset that will end up on the balance sheets of financial institutions and even nation-states. “Keep calm and HODL Bitcoin” may be the best investment strategy for the coming years.
