Here’s why Bitcoin could become the currency of choice for international trade
Could people (who are still unconvinced) change their perspective about Bitcoin? A host of companies now look to the asset for its properties to hedge inflation, a fact that recently established Bitcoin as a popular store of value asset among retailers and companies alike. But some experts foresee BTC’s potential to become a global currency.
Recently, Citi Bank’s new report stated that given Bitcoin’s “global reach and neutrality,” the asset could become the “currency of choice for international trade.”
The report stated that a decentralized cryptocurrency such as Bitcoin could be “preferred” as government or outside entities cannot interfere with the asset’s supply. Such properties could help decouple trade from political shocks.
For instance, the dollar is often the default trade currency today, but growing political tensions, especially between US and China, create “concerns about the future.” The Citi Bank report stated:
A focus on global reach and neutrality could see bitcoin become an international trade currency. This would take advantage of bitcoin’s decentralized and borderless design, its lack of foreign exchange exposure, its speed and cost advantage in moving money, the security of its payments, and its traceability.
Citi Bank identified Bitcoin as “the most well-established and liquid cryptocurrency,” which makes the asset the “likely beneficiary of a move to a new crypto trade currency.”
However, some obstacles remain, which stand in the way of this prediction coming true. These include transaction speed and security issues. Though Visa seems to process payments faster than Bitcoin, the digital asset performs better when compared to traditional payments.
Although Bitcoin faces “a host of risks and obstacles,” some that arise from regulations, when potential hurdles are weighed against opportunities, Bitcoin appears to be at the “tipping point” and could even transform cryptocurrency into the mainstream.
The report noted Bitcoin’s shift from its retail-focused endeavor to becoming an institutional favorite. A primary indicator of this fact is that BTC is often considered ‘digital gold’ due to its finite supply.
Furthermore, exchanges, trading, data, and custody services are revamping their services with specific enhancements to “accommodate the requirements of institutional investors.”
Across the sector, some companies have stepped in to help other firms that want to access Bitcoin. Recently, British crypto firm BCB Group launched a new service that is dedicated to assisting corporations that want to add Bitcoin to their treasuries. Even Coinbase seeks to serve companies that want to “hedge or diversify their excess cash” with crypto. The exchange was also behind Tesla’s famous Bitcoin investment and has assisted MicroStrategy as well.