Will Banks Eventually Flock to Bitcoin?
As previously reported by Bloomberg, central banks are purchasing massive amounts of gold. The estimate is roughly 20% of the global supply of the precious metal according to Goldman Sachs. This seems to be the start of a trend among central banks, with many wary of the U.S. Dollar.
This may be why gold has been trading at some of the highest rates seen, since roughly 2014. Gold Futures is currently trading at $1,468 with some anticipating that it will head higher.
Demand for gold seems to possibly be based in the fear of a recession or downturn in the U.S. Dollar.
"De-dollarization in central banks - demand from central banks for gold is biggest since the Nixon era, eating up 20% of global supply. I am going to like gold better than bonds because the bonds won't reflect that de-dollarization" said Jeff Currie, the head of global commodities research at Goldman Sachs.
Banks on Blockchain & Bitcoin
Many banks have experimented with blockchain technology in one way or another. Santander Bank have tested Ethereum's blockchain for bond issuance. JP Morgan have developed their own stablecoin for interbank settlements and nearly every bank today has a blockchain department.
Despite financial institution's cautious embrace of blockchain technology in one way or another, many are still suspicious of Bitcoin. The Danish bank Nordea notoriously banned it's employees from privately buying the cryptocurrency.
While Bitcoin & cryptocurrencies are considered by many as safe haven in case of a financial or political turmoil, it might take financial institutions some time to realize that. At the moment banks and financial institutions are mostly operated by an older generation baffled by the tech. Once they become familiar with it in time or are replaced by new executives, we might see some real change.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado