According to Vincent Mortier (deputy group chief investment officer), and Didier Borowski (head of global Views) at Amundi, cryptocurrencies and popularity of blockchain assets among investors are at the crossroads of technological innovation, finance and monetary policy. However, even if such an innovation may be a step towards a more inclusive form of finance, it cannot yet challenge the monopoly of central banks in terms of monetary policy without putting the entire financial system at risk.
This evolution, almost certainly of a speculative nature according to economists, raises questions about the nature of these activities, their function and their evaluation, bringing into play many different themes: disruptive technological innovation and the search for decentralized finance and inclusive, the growing digitization of our economies and also the search for new safe havens, in a context in which public debt tends to be increasingly monetized in the main advanced economies.
“If it is true that the first cryptocurrencies were created after the Great Financial Crisis of 2008, it is also true that the cataclysm triggered by the Covid-19 pandemic gave them wings, so much so that the value of bitcoin has increased more than seven times. in one year “, Mortier points out.
“It is up to the regulators to define a regulatory framework that allows them to take advantage of the development of these activities without jeopardizing macro-financial stability”.
In addition to the various product categories, what is important to underline is that demand no longer comes only from retail customers. The number of companies, institutional investors and investment funds interested above all, but not limited to, bitcoin is constantly expanding.
“The most emblematic decision was that of Tesla to buy bitcoin for $ 1.5 billion in early February. Payment platforms, such as Paypal, now accept bitcoins as a form of payment – says Mortier, adding that – after these developments, expectations have obviously arisen regarding a strong increase in demand. “
However, there has been criticism of these faster, more reliable and cheaper payment systems, both nationally and between nations, an objective that unites most governments and central banks. In fact, if on the one hand cryptocurrencies have the power to change global finance for the better, on the other their use as a means of payment is potentially destabilizing and could involve systemic risk: they will question the monopoly of central banks regarding production. and monetary policy over the medium to long term.
In this regard, the economists of Amundi recognized that it is “undeniable that blockchain technology offers the opportunity to improve financial inclusion”, however, “the challenge that regulators and central banks will have to face in the 21st century will be to exploit the advantages of innovation by controlling its excesses. Only when the regulatory environment has stabilized and the relationship with digital currencies has stabilized. will be clarified, asset managers will be able to recommend digital assets as safe investment vehicles. “
