According to Mint, One of India’s largest banking institutions, HDFC bank has recently published a report stating that just a matter of time when Indian investors will have the legal right to access digital currencies. HDFC states that one must watch this space closely as the global central bank moves into the crypto game.
The banking giant recently published a report “Cryptocurrencies: Fad or Forever?” The bank treasury team led by economy Abheek Barua expressed its view on the development in the crypto spaces.
The report from perhaps the greatest lender in India has come when there is equivocalness over crypto guidelines. Last year, Supreme Court had overturned RBI’s ban and permitted the lenders to extend banking facilities for such transactions. Buy it also warned to stay away from the volatile market. In India, the RBI has indicated that it is ‘Very much in the game’ and will launch its own CBDC.
Contrarily, some banking institutions like ICICI Bank, Yes Bank, and Paytm payment bank have served ties with the crypto sector. The Indian government is in the process of formulating a bill on cryptocurrencies.
The HDFC Bank report was hopeful that, like gold, bitcoin could evolve into a major asset class.
“We find a positive correlation between gold and bitcoin daily returns. The correlation was weak to start with but it is has been raising from a portfolio diversification perspective it has the properties of being a good hedge.”
Also Read: Indian Government Report Considering Crypto Regulation Instead Of Ban
The bank also noted the bitcoin fluctuation price with social sentiment is something one must be aware of. “Yes they help to hedge against the sharp movement in other asset classes but its own volatility that seems to be driven primarily by transient bouts of intense interest is a bit of a dampener.”
“Additionally central bank digital currencies (CBDCs) could speed delivery of a directed stimulus to support the economy during crisis/ economic stress thereby creating upward pressure on prices,” the report added.
