Could CBDCs Be a Threat Crypto Adoption?
Central banks don’t favor cryptocurrencies due to their inherent disruptive features, but central banks globally are now considering their own digital currencies (CBDCs). Is there any threat to crypto adoption posed by CBDCs?
The development is so swift that the International Monetary Fund has begun talking openly about the pros and cons of the CBDC project. China has even reached the testing stage of its digital yuan, currently using it for workers’ subsidies in Suzhou. Some may ask the question “Are central banks trying to kill cryptocurrencies with CBDCs?”
In the latest podcast, BCH’s Roger Ver disclosed his strong concerns about the US digital dollar, Fedcoin. Although he called it a good idea, he noted that the launch of Fedcoin may prompt people not to switch to the real cryptocurrency. He said:
“If people have the US dollar issued as a digital token, the gap between the US dollar digital token and real cryptocurrencies is much smaller. And if the gap is much smaller, people have much less of an incentive to jump over the rest of the way to real cryptocurrencies.”
Bitcoin is in a tough position right now. On the one hand, CBDCs are attempting to knock it off the table, and on the other hand, other altcoins are competing for the top coin’s position. It is known that Bitcoin has a number of issues such as scalability, transaction speed and privacy. Altcoins like ETH, XRP, BCH, and XMR are all proving to be useful in their right.
The key difference between BTC and altcoins such as BCH and Monero as stated by Ver is that while Bitcoin is centered around being the store of value, the usability is not paid much attention, whereas “Bitcoin Cash is trying to focus on the usability aspect; being usable as credit cards or cash and Monero is completely focused on providing privacy.”
However, many think that Bitcoin and other altcoins are just designed in a different way and most have been on their way to recovery since the market crash.
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