Binance Changpeng Zhao, CEO of the leading crypto exchange, has said that the launch of a Central Bank Digital Currency (CBDC) could threaten the existence of Bitcoin. However, the CEO said that CBDC could only be a treat to Bitcoin if they are designed well enough.
Central Bank Digital Currencies have continued to gain traction as many countries globally are looking at launching a CBDC. Even the International Monetary Fund and its former managing director, Christine Lagarde, are talking openly about the pros and cons of the idea.
China leads the CBDC race as the Digital Yuan is already in its final stage of testing and would be launched anytime soon.
Mostly, it is believed that when countries begin to launch their CBDC, it might take a negative toll on Bitcoin and other cryptocurrencies.
However, Binance Changpeng Zhao said that any blockchain or digital currency would be good for the crypto industry generally. He said this is because it would legitimize digital assets and bring more awareness to it. The CEO also noted that as countries globally are working on launching their CBDC, most of these currencies are likely to be restrictive and would evolve with time.
Direct threats CBDC would have on Bitcoin – Binance Changpeng Zhao
Binance Changpeng Zhao disclosed that a lot of CBDC would not offer much financial freedom like Bitcoin and other cryptos as they would be controlled by the government.
The CEO, however, noted that on a long term if other countries begin launching CBDCs that are more open, free like Bitcoin, then crypto would be threatened.
Zhao likened it to HTML5 replacing HTML 4 web language.
Interest in CBDC continues to grow globally
Interest in CBDC has grown with mixed views in 2020. Several countries like Canada, Bahamas, Japan, Russia are all working on launching a CBDC.
The US also are beginning to pay attention to launching a CBDC although Jerome Powell, Federal Reserve Chair, has said he will not be pressured to launch a digital dollar. Antony Pompliano, a crypto enthusiast and co-founder Morgan Creek digital, believes that US would be behind China if a CBDC is not launched soon.
