Morgan Stanley Report: BTC and CBDCs Could Challenge Dollar’s Dominance

Morgan Stanley Report: BTC and CBDCs Could Challenge Dollar’s Dominance

A recent report from Morgan Stanley suggests that both Bitcoin (BTC) and Central Bank Digital Currencies (CBDCs) have the potential to challenge the dominance of the U.S. dollar on the global stage. Analysts at the investment bank highlight that Bitcoin, which currently accounts for around 60% of international foreign exchange reserves, could further accelerate the shift away from the dollar as a global currency.

Andrew Peel, Morgan Stanley’s head of digital assets, points out that the recent approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) has significantly contributed to this shift. The report notes that weekly inflows into new Bitcoin ETF products have exceeded $1.18 billion. Additionally, the widespread adoption of Bitcoin, with 106 million people worldwide owning the cryptocurrency and Bitcoin ATMs available in over 80 countries, further underscores its growing influence.

In addition to Bitcoin, the report acknowledges the potential impact of CBDCs from various countries on the dominance of the U.S. dollar. CBDCs have the capability to facilitate fast cross-border payments without the necessity of a common currency, such as the U.S. dollar.

The report states, “[CBDCs] 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.”

According to Block Research, Bitcoin’s current dominance in the cryptocurrency market stands at nearly 49%. In November 2023, Bitcoin’s share of the cryptocurrency market exceeded 51.4%, marking one of the highest figures in recent years. This growing dominance of Bitcoin underlines its significant role in the cryptocurrency market and its influence on altcoins and overall market sentiment.

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