Crypto ownership has nothing to do with distrust of fiat: BIS study

[ad_1]

The Bank for International Settlements (BIS), a global financial institution owned by some of the world’s largest central banks, is trying to dispel the theory that cryptocurrency ownership is linked to mistrust of finance traditional.

On Thursday, the BIS published an article on the socio-economic drivers of cryptocurrency investments in the United States. Using representative data from the U.S. Consumer Payment Choice Survey, BIS argued that distrust of fiat currencies such as the U.S. dollar had nothing to do with investors’ motivation to hold cryptocurrencies like Bitcoin (BTC), stating:

The demand for cryptocurrencies is not driven by distrust of cash or the financial industry, as there are no differences in the perceived safety of cash and offline and online banking. We can thus first refute the hypothesis according to which cryptocurrencies are sought after as an alternative to fiat currencies or to regulated finance.

The authority pointed out that cryptocurrencies are not sought after as an alternative to fiat currencies or regulated finance, but rather are an object of niche digital speculation. The BIS noted that from a policy perspective, the overall analysis to take is that the objectives of investors are the same as those of other asset classes, just as regulation should be.

Related: Adoption of Bitcoin in El Salvador is an Interesting Experiment, Says BIS Executive

The BIS paper also describes the main correlations between crypto investment choices and level of education and income, suggesting that cryptocurrency owners are generally more educated than average. Ether (ETH) and XRP investors showed the highest level of education in BIS analysis, while those owning Litecoin (LTC) were the least educated, with Bitcoin owners ranking in the middle.

Average education per crypto owner. Source: BIS

The new report brings significant relevance to the fact that cryptocurrencies like Bitcoin pose no threat to traditional financial tools, as demand for crypto is not driven by distrust of cash. A number of global authorities and institutions have previously expressed concerns about the ability of Bitcoins to capitalize on global distrust of traditional finance.

At the end of December, Morgan Stanley Investments Ruchir Sharma argued that the reign of the US dollar will likely end due to the global distrust of traditional finance, while Bitcoin would capitalize on the lack of trust.

[ad_2]