Deutsche Bank thinks that crypto revolution is ‘inevitable’

Another big global investor has placed its bet on the crypto revolution. Germany’s Deutsche Bank wrote in its report ‘Imagine 2030’ that the forces that hold the current fiat money system together look fragile and, over the next decade, the demand for alternative currencies, from gold to crypto, could take off.

“While critics bemoan cryptocurrencies as constrained by regulatory hurdles, we believe the incentives of governments and card providers are such that digital currencies are inevitable,” the report wrote, explaining why it expects a new and mainstream cryptocurrency could unexpectedly emerge.

Until now, cryptocurrencies have failed to affirm as a means of payment, despite their well-known benefits: security, speed, low transaction fees, ease of storage and relevance in the digital era. Nevertheless, according to the DB report, this may change in the next decade. Should governments back cryptos, consumers want them, and if current trends continue, there could be 200m blockchain wallet users in 2030 and digital currencies should eventually replace cash, the researchers estimated.

‘According to Deutsche Bank Data Innovation Group primary research, nearly two thirds of consumers prefer dematerialised to cash payments and a third are concerned by anonymity. These are the two things that cryptocurrencies do best,’ the report said.

Not to mention the role that China and India will play: ‘Until now, China and India banned the purchase and the sale of cryptocurrencies. But things are moving quickly.’

EU confirms its firm position on stablecoins, with exceptions

The European Union officials has not changed their traditional stance on stablecoins. Nevertheless, reports that a senior government official admitted this ‘firm’ stance will not stop stablecoin developers from developing their plans, as Europe is not against innovations and simplified payments.

Last week, the European Council and the Commission adopted a joint statement, writing that no global stablecoin project should receive the green light in the EU ‘until the legal, regulatory and oversight challenges and risks have been adequately identified and addressed.’ A firm position, yes, but with some possible openings.

Darius Trakelis, Director of the EU and International Affairs Department at the Lithuanian Ministry of Finance, speaking to, denied that the statement was solely targeted at Facebook’s Libra. ‘It is not only about Facebook. In fact, you will not find any mention of Facebook in the document. The Facebook initiative sparked the discussion. But the EU’s position is horizontal; it would apply the same to any other stablecoin initiatives.’

State Street says that 38% of clients will buy digital assets in 2020

The majority of asset managers that bank with State Street are interested in digital assets, but none have asked the global custodian to store them yet, reports.

‘We’re talking to them less about ‘Can you custody this,’ and more about how we can work together to make sure these changes aren’t disruptive to our business models,’ said Jay Biancamano, State Street’s managing director of digital product development and innovation.

The firm will have a better idea of what it will do with digital asset custody in 2020, he said. The company is also interested in other businesses, such as fund administration, private placements, issuance and trading of digital assets. Despite their lack of interest in a custody solution, the bank’s s clients are continuing to invest more in the new asset class.

According to a survey to be released this week, 94% of State Street clients hold digital assets or related products (e.g. bitcoin futures) and 38% of them said they will increase their allocation of digital assets in 2020. 45% said their allocation would stay the same, according to the survey, conducted for the bank this year by quantitative analysis firm Oxford Economics.

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