{"id":281604,"date":"2021-01-22T16:04:14","date_gmt":"2021-01-22T21:04:14","guid":{"rendered":"https:\/\/insidebitcoins.com\/?p=281604"},"modified":"2021-08-28T11:28:10","modified_gmt":"2021-08-28T15:28:10","slug":"ubs-executive-downplays-bitcoins-ability-to-replace-fiat","status":"publish","type":"post","link":"https:\/\/insidebitcoins.com\/news\/ubs-executive-downplays-bitcoins-ability-to-replace-fiat","title":{"rendered":"UBS Executive Downplays Bitcoin’s Ability to Replace Fiat"},"content":{"rendered":"

Criticisms against Bitcoin have been rather rampant in the past few days, with some capitalizing on its recent slump to hammer its perceived drawbacks. <\/span>In a recent Bloomberg\u00a0<\/span>interview<\/span><\/a>, Paul Donovan, the Chief Economist at UBS Global Wealth Management, explained why he believed that digital assets would be unable to replace fiat currencies.<\/span><\/p>\n

Volatility and a Deflationary Monetary Policy<\/b><\/h2>\n

In the interview from earlier this week, Donovan explained that cryptocurrencies wouldn\u2019t be able to replace fiat currencies because of their generally fixed supply. Unlike fiat currencies, digital assets can\u2019t function as stores of value, and they don\u2019t offer the same levels of certainty.<\/span><\/p>\n

Donovan particularly hammered the point of fixed supply, explaining that the number of assets like Bitcoin in circulation can\u2019t be reduced if demand drops. In part, he explained:<\/span><\/p>\n

\u201cA proper currency can be a stable store of value, providing certainty that it will be able to buy the same basket of goods tomorrow as it buys today. That confidence is derived from central banks\u2019 ability to reduce supply when demand is falling. There is no such mechanism for switching off supply on most cryptocurrencies\u201d<\/span><\/p><\/blockquote>\n

Donovan also harped on the ages-old argument that cryptocurrencies are too volatile. <\/span>As he explained, people won\u2019t be sure of what they can buy with a cryptocurrency unit tomorrow. So, they will be less comfortable with using it as a currency.<\/span><\/p>\n

Bitcoin\u2019s monetary supply has been one of its many strengths, with many pointing out that its resistance to inflation makes it the ideal global reserve currency for a 21st-century economy. The asset\u2019s fixed monetary policy is essentially the reason for the institutional investment push that has sustained the market for the past year.<\/span><\/p>\n

If It Ain\u2019t Broke, Don\u2019t Fix It<\/b><\/h2>\n

While Donovan\u2019s criticism might seem harsh, it is worth noting that Bitcoin has never reached a point where demand became alarmingly low. The asset has amassed a significant number of believers, and these people are waiting to ride out any storm. If the crypto winter couldn\u2019t crash the asset entirely, hardly will anything else do so.<\/span><\/p>\n

As for the volatility argument, this isn\u2019t the first time a critic will raise the point. Just this week, Gerald Moser, the Chief Strategist at top British bank Barclays,\u00a0<\/span>told<\/span><\/a>\u00a0Financial News that Bitcoin\u2019s volatility made it an \u201cuninvestable asset.\u201d<\/span><\/p>\n

In his interview, Moser explained that investors wouldn\u2019t be able to add Bitcoin to their portfolios and make projections because it is just too volatile. He added that the leading cryptocurrency\u2019s recent rally was primarily due to a growth in retail investors instead of institutions who would be able to sustain the market for the long term. Moser appears to have been wrong on that note, with several metrics pointing to a surge in institutional crypto investment.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Criticisms against Bitcoin have been rather rampant in the past few days, with some capitalizing on its recent slump to hammer its perceived drawbacks. In […]<\/a><\/div>","protected":false},"author":1770,"featured_media":281611,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[5936,734,11925,11904],"class_list":["post-281604","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-more-crypto-news","tag-barclays","tag-bitcoin","tag-donovan","tag-ubs"],"acf":[],"yoast_head":"\nUBS Executive Downplays Bitcoin's Ability to Replace Fiat - InsideBitcoins.com<\/title>\n<meta name=\"description\" content=\"Paul Donovan of UBS Global Wealth Management explained why he believed that digital assets would be unable to replace fiat currencies.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/281604\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UBS Executive Downplays Bitcoin's Ability to Replace Fiat\" \/>\n<meta property=\"og:description\" content=\"Paul Donovan of UBS Global Wealth Management explained why he believed that digital assets would be unable to replace fiat currencies.\" \/>\n<meta property=\"og:site_name\" content=\"InsideBitcoins.com\" \/>\n<meta property=\"article:published_time\" content=\"2021-01-22T21:04:14+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-08-28T15:28:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/insidebitcoins.com\/wp-content\/uploads\/2021\/01\/9k-6.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"300\" \/>\n\t<meta property=\"og:image:height\" content=\"168\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jimmy Aki\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@adejimi\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jimmy Aki\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/281604#article\",\"isPartOf\":{\"@id\":\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/281604\"},\"author\":{\"name\":\"Jimmy Aki\",\"@id\":\"https:\/\/insidebitcoins.com\/#\/schema\/person\/a66ff7827d8bed054aa6be4e9d8c1dad\"},\"headline\":\"UBS Executive Downplays Bitcoin’s Ability to Replace Fiat\",\"datePublished\":\"2021-01-22T21:04:14+00:00\",\"dateModified\":\"2021-08-28T15:28:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/281604\"},\"wordCount\":485,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/insidebitcoins.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/281604#primaryimage\"},\"thumbnailUrl\":\"https:\/\/insidebitcoins.com\/wp-content\/uploads\/2021\/01\/9k-6.jpg\",\"keywords\":[\"barclays\",\"Bitcoin\",\"Donovan\",\"UBS\"],\"articleSection\":[\"More Crypto News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/281604#respond\"]}],\"copyrightYear\":\"2021\",\"copyrightHolder\":{\"@id\":\"https:\/\/insidebitcoins.com\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/281604\",\"url\":\"https:\/\/insidebitcoins.com\/wp-json\/wp\/v2\/posts\/281604\",\"name\":\"UBS Executive Downplays Bitcoin's Ability to Replace Fiat - 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