Digital currencies and tokenisation of assets are a reality and may be a dominant factor in the future, but that doesn’t necessarily mean that Bitcoin could replace fiat currency as a medium of exchange, said Piyush Gupta, CEO of DBS. “We launched the first bank-sponsored digital exchange in December, which lets you tokenise assets and securities,” said Gupta, ET’s Global Indian of the Year.
“So by our action we are creating capabilities for crypto, digital currencies and tokenisation for the future. But Bitcoin as a replacement for money is still challenging. Money is a medium of exchange, a unit of account and store of value.’’ The world is divided on the future of cryptocurrencies with regulators like the Reserve Bank of India (RBI) opposing them as a medium of exchange, while billionaire entrepreneurs like Elon Musk are backing them.
While cryptocurrencies have become a craze, the volatility of Bitcoin has made administrations nervous.
“Bitcoin is not a good medium of exchange because even though Elon Musk says he will take it for Tesla, it is very hard to do transactions because you can only do nine transactions per second while Visa and Mastercard can do hundreds of thousands,” said Gupta.
Gupta of DBS, which became the first international bank to acquire a domestic, troubled lender in recent memory, said that Lakshmi Vilas Bank NSE 4.79 % fits into our strategy. He visualised the growth path a few years ago through the subsidiarisation of DBS in India to gain equal footing with domestic banks. “We were mentally prepared and had done some homework around a range of possibilities and that allowed us to respond very quickly,” he said. DBS India took over Lakshmi Vilas Bank last year.
Source : PTI