Emirates NBD mulls adding Bitcoin to investment portfolio

Emirates NBD is exploring the possibility of adding Bitcoin to its investment portfolio, referring to it as digital gold. This move highlights the increasing regional focus on cryptocurrencies and blockchain technology.

Speaking with CNBC, Maurice Gravier, the group’s chief investment officer, mentioned that while the bank has not yet acquired Bitcoin, it has integrated it into its internal investment framework.

He stated that pricing models, macroeconomic considerations, and behavioural trends are being assessed before making any final investment commitments.

Gravier outlined that the suggested initial allocation might fall between 0.5% and 1% of the currency held in "balanced" portfolios, emphasizing that Bitcoin is now regarded as a store of value rather than its earlier classification as an alternative currency.

He compared it to digital gold, citing its limited supply, the robust security provided by its proof-of-work system, and its minimal inflation rate.

However, he stressed that investors should be cautious, as price volatility and Bitcoin's correlation with high-risk asset markets remain key factors to evaluate before committing any capital.

The UAE’s second-largest bank has emphasized its singular focus on Bitcoin, asserting that relying on it as the sole monetary tool minimizes exposure to technical vulnerabilities compared to platforms like Ethereum that depend on smart contracts.

Graveill referred to tokenization as a groundbreaking evolution in the global financial landscape. He explained that tokenized assets have the potential to bring greater pricing transparency, facilitate direct transactions between parties, and virtually eliminate intermediary costs.

He further highlighted that the bank expects tokenization to grow significantly in private markets and traditional securities, paving the way for continuous liquidity and more transparent pricing for assets previously regarded as illiquid.

Gravier further highlighted that remittances and cross-border trade are key factors behind the swift uptake of stablecoins in the Middle East. He noted that transaction volumes for dollar-pegged stablecoins now surpass those of major payment card networks such as Visa and Mastercard combined.

Additionally, he explained that Emirates NBD, catering to a significant expatriate population, sees stablecoins as an essential backbone for future payment systems rather than a short-lived trend.