Citi says bitcoin could become the currency of global trade in a ‘massive transformation’ – or it could implode

Citi says bitcoin could become the currency of global trade in a ‘massive transformation’ – or it could implode

Bitcoin could be at the start of a "massive transformation" into the mainstream of finance, a major report from Citi has said, and could even become the currency of global trade.

However, Citi analysts said bitcoin is at a "tipping point" and could also suffer a "speculative implosion". They said improvements to cryptocurrency systems would be needed to drive wider adoption, and said increased regulation could drive away some of the most innovative players.

In a 108-page deep-dive into cryptocurrencies, Citi said there had been a major change in bitcoin from "primarily a retail-focused endeavor to something that looks attractive for institutional investors" as they search for higher returns and alternative assets.

Citi's analysts speculated that a rise in other bitcoin-like products - such as private "stablecoins" and central bank digital currencies - would add legitimacy to the crypto world, while making such technologies easier to use and more integrated into economies.

"In this scenario, bitcoin may be optimally positioned to become the preferred currency for global trade," a team of Citi analysts led by Sandy Kaul, global head of Citi's business advisory services, said. in a report.

"It is immune from both fiscal and monetary policy, avoids the need for cross-border foreign exchange (FX)