According to Sandy Kaul, the Head of Digital Asset & Investor Advisory Services at Franklin Templeton, developing countries are increasingly adopting Bitcoin (BTC) as a means to compete with larger economies on a “more equal playing field.” During a recent interview on the Coin Stories podcast, Kaul discussed the future of Bitcoin adoption, highlighting its potential impact on investor portfolios, technology stacks, and its role among nations and governments. She believes that BTC is becoming an attractive tool for less developed nations due to its ability to combine their buying power around the digital currency. Kaul predicts that more developing countries will follow this trend in the future.
Kaul argues that Bitcoin will eventually become an essential asset for national treasuries worldwide. While Central Bank Digital Currencies (CBDCs) may improve cross-border trade efficiency, they will still be subject to national exchange rate risks. In contrast, Bitcoin can be used as a “base unit of international trade,” requiring every country to hold BTC reserves to facilitate efficient conversions. Kaul predicts that Bitcoin will increasingly be integrated into the traditional banking system and become a foundational part of it.
As an alternative asset class, BTC has performed exceptionally well over the past decade, even during the challenging periods commonly referred to as “crypto winter.” Kaul believes that Bitcoin can provide alternative exposure and diversification to investment portfolios, leading to better risk-adjusted returns. She highlights the potential benefits that modern-day investors and spenders may unlock through cryptocurrencies in the next 5 to 10 years. Kaul envisions Bitcoin and other cryptocurrencies acting as loyalty programs, offering a range of benefits to users based on their account balance and investment choices.
Franklin Templeton, a leading asset manager with $1.5 trillion in assets under management, is among 13 applicants seeking approval for a Bitcoin spot ETF in the United States. With regulators showing increasing openness towards Bitcoin-related products, analysts anticipate that Franklin Templeton and other applicants will receive approval for launch in early 2022. By offering BTC exposure through an ETF wrapper, the fund aims to make it easier for investors to include Bitcoin in their portfolios.
Kaul’s insights highlight the growing significance of Bitcoin adoption, both in developing countries and as a vital asset for national treasuries worldwide. As Bitcoin continues to gain traction, its role in the traditional financial system is likely to expand. The potential benefits of cryptocurrencies, such as alternative exposure, diversification, and loyalty programs, further contribute to their appeal. With major asset managers like Franklin Templeton actively seeking Bitcoin investment opportunities, the future of Bitcoin adoption appears promising.