The Bank of America Corporation (BoA) believes the digital asset sector is too big to ignore. BoA revealed this news through a new research report published by its subsidiary BofA Securities. In the publication, the American multinational investment bank noted that cryptocurrencies could form an entirely new asset class.
According to the financial institution, Bitcoin’s (BTC/USD) $942,637,632,999.00 (£691,943,154,502.90) valuation is notable. However, the $2.20 trillion (£1.61 trillion) crypto market has evolved to feature other important coins.
BoA pointed out that the market comprises coins that act like operating systems. Breaking down this description, the bank pointed out how decentralized applications (dApps) eliminate middlemen and enable financial inclusion.
BoA also mentioned fiat-pegged stablecoins, as well as central bank digital currencies (CBDCs), which have the potential to edge out fiat currencies.
On top of this, the bank highlighted how non-fungible tokens (NFTs) have introduced unprecedented engagement between fans and content creators. Nonetheless, BoA was quint to note that the NFT space has heightened risks that might cap its growth.
The bank went on to note that,
Digital assets are not about payments per se. They’re about a new computing paradigm – a programmable computer that is accessible everywhere and to anyone and owned by millions of people globally.
The crypto space is set for more growth
According to BoA, the digital asset ecosystem has expanded quickly to hit market values that match some leading public companies. Despite this expansion, the bank believes that the crypto industry is just getting started.
The financial institution added that while there is no way of covering the complexities of the rapidly-changing blockchain-based ecosystem, it believes this is the beginning of a long journey that covers what it considers the next generation of technology.
Explaining why it believes blockchain-based economies will succeed, BoA said the current financial infrastructure cannot handle the requirements of the global economy as it transitions to a digital model. According to the bank, the current system is flawed because it is centralized, inefficient, and inaccessible.
On top of this, BoA pointed out that the infrastructure lacks interoperability and transparency. In comparison, blockchain-based financial ecosystems offer services that are cheaper, faster, secure, and personalized.
Per BoA, the blockchain has distinctive traits that support the above benefits. These include being permissionless, trustless, global, composable, and decentralized.
BoA noted that these features would help the digital asset sector go mainstream despite regulatory headwinds. The bank also said the high rates of crypto adoption would foster more growth, point out that there were approximately 221 million crypto users by June this year compared to 66 million users in 2020.
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