Morgan Stanley says central bank digital currencies won’t be a threat to cryptocurrencies

Major investment bank Morgan Stanley believes that central bank digital currencies will not pose a threat to the existence of cryptocurrencies. The bank believes that the two types of digital currencies can coexist because they have different purposes and different appeals.
Morgan Stanley analysts, including chief economist Chetan Ahya, discussed the impact of central bank digital currencies (CBDCs) on Bitcoin and other cryptocurrencies in a report published last week. They wrote:
“Cryptocurrencies will still exist because they continue to serve other use cases. For example, some cryptocurrencies can serve as a store of value because some segments of the public do not fully trust fiat currencies.”
The analysts explained that the uses and appeal of central bank digital currencies and cryptocurrencies are different, adding that cryptocurrencies can be both a store of value, similar to gold, and a speculative asset.
A growing number of people say Bitcoin is a store of value, including pro-Bitcoin U.S. Senator Cynthia Lummis and Dallas Federal Reserve Bank President Rob Kaplan.
As for why investors are becoming more and more interested in Bitcoin and other cryptocurrencies, Morgan Stanley analysts said:
“Investor interest in cryptocurrencies has risen in tandem with unprecedented monetary and fiscal policies in response to the pandemic.”
In contrast, Morgan Stanley said in the report that government-backed digital currencies may pose the greatest risk to stablecoins.
More and more central banks are becoming increasingly interested in issuing their own digital currencies. The Bank for International Settlements (BIS) said that 86% of central banks around the world are at different stages of researching digital currencies.
Morgan Stanley believes that CBDCs will be completely different from cryptocurrencies because they are unlikely to use blockchain. The European Central Bank (ECB) has similarly said that CBDCs have little to do with cryptocurrencies, and the bank considers CBDCs to be speculative assets rather than actual currencies.

Source: News.bitcoin.com