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Bitcoin will play into the hands of Central Banks’ interest in CBDC

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Will Central Bank Digital Currencies Kill Bitcoin? | #LIVE AMA with Simon Dixon

Bitcoin will play into the hands of Central Banks' interest in CBDC

Bitcoin will play into the hands of Central Banks’ interest in CBDC
CONTENT

  • World Central Banks Intensify Work on Projects to Launch Their Own Digital Currencies (CBDC).

  • These processes have also accelerated under the influence of the coronavirus pandemic..

  • Grayscale Analysts Believe CBDC Launch Will Support Bitcoin.

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Bitcoin will play into the hands of Central Banks' interest in CBDC

The explosive interest in digital currencies of central banks is a bullish factor for the bitcoin rate, according to the largest manager of cryptoasset management..

Grayscale, the world’s largest digital asset management company, recently released a report suggesting that the current surge in interest in the idea of ​​digital currencies issued by central banks (CBDC) banks (CBDC) .As … More) can present the benefits of bitcoin in a favorable light.

CBDC has become a fashion trend

Recently, many of the world’s central banks are increasingly considering the possibility of launching their own digital currency. They are prompted to do this, among other things, such as the COVID-19 pandemic, which revealed the shortcomings of the traditional banking infrastructure, and the activation of China to work on the launch of its “digital yuan”.

Bitcoin will play into the hands of Central Banks' interest in CBDC

The pros and cons of using CBDC are publicly discussed by IMF officials. According to the Bank for International Settlements (BIS), about 80% of Central Banks around the world are currently working on such projects. It is unlikely that all these projects will be brought to completion and implemented. However, fewer CBDCs launched may be enough to highlight the benefits of bitcoin and stimulate its massive adoption in the face of declining public confidence in government..

CBDC vs Bitcoin

However, Grayscale experts believe that such centralized digital currencies will lose to Bitcoin in a whole range of parameters, including the following:

  • Monetary policy. The supply of bitcoin remains strictly limited to 21 million coins. Meanwhile, CBDC emissions will be dictated by government policy, so such currencies will be subject to inflation, like fiat money..
  • Geography. Bitcoin knows no state borders and is available to everyone on the planet via the Internet. The procedure for international settlements in CBDC may continue to be dictated by current government policy.
  • Custody and money transfers. In the case of decentralized bitcoin, the user himself owns the private keys of his money, while CBDCs can remain subject to government control or even freeze or confiscation in certain cases..
  • Bitcoin will play into the hands of Central Banks' interest in CBDC

Perhaps such comparisons will help users realize what money is really “good”, analysts at Grayscale say..

In addition, they add, the launch of CBDC could lead to competition of such digital currencies with traditional commercial banks, which could negatively affect this segment, as well as lead to politicization of the entire financial services sector. This situation could slow down the massive adoption of CBDC..

Are digital currencies of central banks competing with bitcoin? Do you think Bitcoin will really benefit from the CBCD launch? Share your opinion in the comments and join the discussion in our Telegram channel!

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