Larry Fink, president and CEO of investment firm BlackRock, has said that the war in Ukraine has the potential to accelerate digital currencies. In a letter to investors on Thursday, Fink emphasized the implications of the war for companies, countries and customers. According to Fink, the impact on energy sources will also be addressed. He said:
“The war will prompt countries to reevaluate their currency dependence.”
A global digital payment system could improve the settlement of international transactions
According to Fink, even before the war began, some were looking for a more active role in digital currencies. As an example, he used a study by the US Federal Reserve on the implications of a central bank digital currency. Fink said:
“A global digital payments system, carefully designed, can improve the settlement of international transactions while reducing the risk of money laundering and corruption,” and reduce cross-border transaction costs. As we see 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.”
War is causing changes in financial and energy markets, says Finco
It is reported that BlackRock is planning to offer crypto trading to its investors. In late 2020, Fink noted that rising interest in bitcoin could be a sign that the cryptocurrency was taking its place in the financial system.
The company bought bitcoin futures last year. Earlier this year, BlackRock’s iShares pooled an exchange-traded fund to track the performance of an index made up of blockchain and crypto companies. In the letter, Fink said the war would accelerate some of the trends already created by the pandemic when it comes to how countries are connected to the global economy. He said:
“The Russian invasion of Ukraine has ended the globalization that we have seen over the past three decades.”
Fink also argued that changes in energy resources around the world are the result of war. However, he believes it will make slow progress towards zero net emissions, but will accelerate the transition to green energy sources. He believes that the current crisis will prompt countries to come up with solutions that secure their access to energy.
Wind and solar power would be the easiest option for most countries. He also noted that BlackRock had joined other companies in freezing wallets from Russia, while the company does not have any significant investments in the country.