Bitcoin (BTC) adoption is gaining traction in developing countries, and according to investment management firm Franklin Templeton, this trend is set to continue. Sandy Kaul, the Head of Digital Asset & Investor Advisory Services at Franklin Templeton, highlighted the role of Bitcoin in leveling the playing field for smaller economies. Kaul believes that the digital currency allows these nations to compete more equally with larger economies by leveraging their collective buying power. As a result, she predicts that Bitcoin will become an essential tool for these developing countries, and eventually, every national treasury will need to hold BTC.
While Central Bank Digital Currencies (CBDCs) may enhance cross-border trade efficiency, they are also subject to national exchange rate risks. In contrast, Bitcoin can serve as the “base unit of international trade,” making it necessary for every country to hold BTC reserves for seamless conversions. Kaul foresees Bitcoin becoming an integral part of the traditional banking system, providing a foundation for the financial landscape.
Franklin Templeton, among 13 applicants, is actively pursuing a Bitcoin spot ETF in the United States. With regulators showing increased openness towards this investment product, experts anticipate that Franklin and other applicants will obtain approval for launch in the early months of the coming year. By offering exposure to Bitcoin through an ETF, Franklin Templeton aims to provide an accessible entry point for investors. Kaul emphasized that Bitcoin has been one of the best-performing asset classes in the past decade, even during periods of market downturns known as “crypto winters.”
According to Kaul, Bitcoin serves as an alternative asset class that offers unique exposure and portfolio diversification. By incorporating Bitcoin into investment portfolios, investors can potentially achieve better risk-adjusted returns. Kaul envisions a future where cryptocurrencies unlock previously unexplored benefits for both investors and consumers. She predicts a world where investments and account balances act as loyalty programs, providing users with a range of perks and advantages.
As Bitcoin continues to gain momentum and establish its presence in the financial landscape, it is clear that its role will expand beyond speculation and general interest. Developing countries are recognizing the potential of Bitcoin as an equalizer, enabling them to compete with larger economies. The shift towards Bitcoin adoption in these nations opens the door for wider acceptance and integration into the global financial system.
Bitcoin’s growing adoption in developing countries and its projected significance for national treasuries signal a major turning point in the evolution of digital currencies. As Bitcoin gains acceptance in these economies, it will pave the way for a more inclusive and efficient financial system. With Franklin Templeton actively pursuing a Bitcoin spot ETF and recognizing the value of Bitcoin as a diversification tool, the investment landscape is set to welcome the arrival of this groundbreaking digital asset. As we look towards the future, it is clear that Bitcoin’s potential extends far beyond its current status, promising remarkable transformations in global finance and beyond.