Ruchir Sharma, Morgan Stanley Investment Management’s Chief Global Strategist has outlined the significant competition that the current financial system is facing from bitcoin and other cryptocurrencies.
In his article, published in the Financial Times, Sharma mentioned that this year’s boom in cryptocurrencies should serve as a warning to the governments printing unlimited money worldwide. He added that millennials are likely to keep looking for better alternatives.
Sharma mentioned that recent weakness in the US Dollar has helped bitcoin as people started buying the digital gold to hedge against the dollar weakness. He noted that less Tech-savvy people are still sceptical about bitcoin and other digital assets but young people are preferring cryptocurrencies.
The fund manager acknowledged the progress that digital currencies made in recent years. According to him, bitcoin has positioned itself as a serious competitor to end the dominance of the dollar.
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“Bitcoin has made significant progress in recent years to replace the US Dollar as a medium of exchange. People use to keep BTC only for investment purposes, but that perception is changing now as smaller businesses have started accepting bitcoin for payments worldwide, the adoption has increased in countries where local currencies are unstable,” Sharma said.
The Morgan Stanley executive mentioned the serious challenges cryptocurrencies are presenting in front of monetary authorities around the world. He targeted the US and other major governments by saying that most of them showed little interest in controlling massive deficits and found an easy way of ‘printing’ more money.
“The recent boom of cryptocurrencies should serve as a warning to government money printers around the world, particularly in the US. Authorities must not assume that the traditional currencies like US Dollar or Euro are the only stores of value or mediums of exchange that people will trust forever,” Sharma mentioned.
In his opinion, the recent initiatives by central banks worldwide to restrict the crypto market will only accelerate negative sentiment around traditional currencies like the dollar.