The Singapore-based DBS Bank describes the current state of digital assets in its quarterly report on cryptocurrencies as a “pandemic-led acceleration of adoption.” The chief economist of the multinational bank, Taimur Baig, believes that the ongoing global pandemic is boosting bitcoin adoption worldwide. There have lately been murmurings about a large financial institution – particularly in places like Singapore, Switzerland, and Germany – fielding a new wave of demand for crypto. The adoption of cryptocurrencies has increased this year amid the ongoing pandemic in many countries.
Bitcoin adoption pre and post-pandemic
On the subject of cryptocurrencies like bitcoin, the chief economist identified two distinct demand phases: pre-pandemic and post-pandemic. According to the multinational bank’s chief economist noted that 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,” Taimur Baig said. The demand for crypto post-pandemic is beyond speculative, he added. Further commenting on bitcoin adoption, the DBS Bank chief economist said that people are worried about dollar outflow and wondering if they should hold crypto and gold as a safe-haven currency.
Chinese CBDC may help countries to bypass the US dollar settlement mechanism.
Talking about the emergence of central bank digital currencies across countries, Taimur Baig said that there are two dimensions to think about when it comes to China and its CBDC efforts at “digitizing the redback.” Firstly, a Chinese CBDC is a way that the People’s Bank of China (PBoC) can exercise some control over the country’s sprawling fintech ecosystem. “There’s so much going on at the Alipay, Tencent level,” Baig said. He also mentioned how big fintech companies, including Tencent and Alipay, are making deposits in CDBC. The PBoC has been working on its digital currency for a long time and is now very close at issuing it to the general public.