The CEO of the world’s largest asset manager, Blackrock, says the war between Russia and Ukraine has a “potential impact on accelerating digital currencies.” He confirms that Blackrock is “studying digital currencies, stablecoins and the underlying technologies to understand how they can help us serve our customers.”
Blackrock on the acceleration of digital currencies
Blackrock CEO Larry Fink published his 2022 letter to shareholders on Thursday with a section on digital currencies. Blackrock is the world’s largest asset manager, managing over $10 trillion.
“The Russian invasion of Ukraine has put an end to the globalization we have endured over the past three decades,” Fink wrote. After extensively discussing the impact of the war, the CEO noted:
A less discussed aspect of the war is its potential impact on accelerating digital currencies. The war will prompt countries to re-evaluate their currency dependence.
Several reputable investors have predicted that the war between Russia and Ukraine could risk the US dollar’s role as the world’s reserve currency. Earlier this month, veteran investor Jim Rogers, who co-founded the Quantum Fund with billionaire investor George Soros, said what is happening with Russia and its sanctions is the end of the US dollar. Famed value investor Bill Miller shares a similar view. Mike Novogratz, CEO of Galaxy Digital, recently described, “We are entering an unknown world where people will struggle to figure out what the reserve currency is.”
The Blackrock boss went on to discuss central bank digital currencies (CBDCs). “Even before the war, several governments wanted to take a more active role in digital currencies and define the regulatory frameworks under which they operate,” he stressed. Fink then referred to the Federal Reserve’s study on the potential impact of the US digital dollar. Federal Reserve Chair Jerome Powell has repeatedly said the Fed has not decided whether to issue a CBDC.
Fink outlined some of the benefits that digital currencies can bring. “A global digital payment system, thoughtfully designed, can improve the settlement of international transactions while reducing the risk of money laundering and corruption,” he explained. “Digital currencies can also help reduce the costs of cross-border payments, for example when foreign workers send earnings back to their families.”
As to whether Blackrock will begin offering crypto products and services to customers, Fink said:
Seeing an increasing interest from our customers, Blackrock is studying digital currencies, stablecoins and the underlying technologies to understand how they can help us serve our customers.
In July last year, the CEO said that Blackrock saw very little demand for cryptocurrencies from customers.
However, Fink said last April that he is fascinated by cryptocurrency and believes it could become a “great asset class”. He also said that bitcoin makes the US dollar less relevant and could evolve into a global market.
Still, he remained skeptical about crypto. In October last year, the Blackrock executive indicated that he shared a similar view with JPMorgan CEO Jamie Dimon, who said bitcoin is worthless.
What do you think of Larry Fink’s comments? Let us know in the comments below.
Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.
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