Banking giant Morgan Stanley says that central bank digital currencies (CBDCs) may contribute to a shift away from the US dollar’s hegemony.
In a new research note, Andrew Peel, executive director and head of digital asset markets at the bank says that CBDCs are capable of creating a new standard for cross-border payments, reducing the need for the dollar and traditional payment structures.
Says Peel,
“As CBDCs become more widely adopted and technologically advanced, they hold the potential to establish a unified standard for cross-border payments, which could diminish the reliance on traditional intermediaries like SWIFT and the use of dominant currencies such as the dollar.
Furthermore, CBDCs can enable significant innovation in financial services, such as the use of smart contracts for automating payments, making the concept of programmable money a practical reality.”
The analyst also says that US-dollar-pegged stablecoins are “set to have a profound impact” on the global financial sector and have the potential to reshape how money is moved across borders. Peel suggests that stablecoins may be crypto’s “killer app.”
“Rather than challenge the dollar’s dominance, their continued evolution and growing acceptance by mainstream financial entities underscore their potential to significantly alter the landscape of global finance and in fact reinforce the dollar as the dominant global currency…
As the world adjusts to these technological advancements, understanding the interplay and nuances between traditional fiat currencies, Bitcoin, e-money, and stablecoins becomes crucial. This dynamic is set to significantly influence the future of international trade and finance, potentially reshaping the global economic and financial landscape.”
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- Source: https://dailyhodl.com/2024/01/15/morgan-stanley-says-central-bank-digital-currencies-may-drive-move-away-from-us-dollar/
