A major investment manager has quit his old firm to join a crypto advisory firm, saying “bonds won’t exist in 10 years”. 

Fixed income manager Vimal Gor has quit Pendal Group to join crypto firm Trovio, claiming government bonds are being replaced by fundraising through central bank digital currencies.

Mr Gor was Pendal’s head of bond, income and defensive strategies, but will now head digital asset funds at Trovio. 

He predicts digital currencies issued by central banks will let governments tap into pools of liquidity in “decentralised finance” to raise debt.

“I’ve been sitting talking about the dollar/yen for 30 years and, believe me, it’s very boring,” Mr Gor told reporters in a recent interview.

“Bonds are largely useless in portfolios now and no one will want to buy them as their yields stay depressed, so they won’t be great for governments wanting to raise debt.

“But within 10 years, central banks will have issued their own digital currencies that can access decentralised finance lending pools, which means they won’t have to raise debt from the bond market.

“Bonds won’t exist in 10 years, and the trillions of dollars of bonds we have won’t trade because we’re moving to a world where central banks will set interest rates for people via central bank digital currencies.”

The claims come days after US President Joe Biden released an executive order encouraging the Federal Reserve to look at creating a US central bank digital currency as a matter of “the highest urgency”. 

The US Federal Reserve published a detailed paper on the subject in January.

The Reserve Bank of Australia is researching central bank digital currencies (CBDCs) too.