Bitcoin and central bank digital currencies are being seen as polar opposites within the crypto markets. Now with many nations developing their own CBDCs, it is necessary to consider which one is more likely to end on top in this ‘Bitcoin vs. CBDCs influence game.’
While Bitcoin is decentralized and is not controlled by any central authority, CBDCs are going to do the exact opposite but with the same underlying technology: the blockchain. Although Bitcoin might give people more privacy, CBDCs are more likely to gain people’s trust as they are ‘backed’ by a nation’s central bank, which would be responsible for the asset.
Bitcoin accepted in a court case as collateral
Although Bitcoin has seen rapid adoption in recent years, its use by authorities has remained somewhat lacking; that is, until now. As pronounced by Judge Judith Gibson of the New South Wales District Court, the asset can serve a security function as the judge has accepted that collateral can be paid in BTC with monthly reports warning about volatility.
The proposal, which the judge accepted, was for a 20,000 dollars collateral to be securitized with Bitcoin. While the defense claimed that Bitcoin was unsuitable due to its volatility, the judge demanded a monthly report on the asset’s volatility. Furthermore, the judge recognized the asset as a form of investment which can represent significant value.
Bitcoin vs. CBDCs
In the Bitcoin vs. CBDCs race, the former has a natural advantage over CBDC’s. While CBDCs are reliable and not as volatile as Bitcoin, they are essentially no different than national currencies. Meanwhile, Bitcoin, although it is relatively small, offers much greater freedom and privacy.
While the government can seize your CBDC, they cannot snatch your Bitcoins without the private keys, no matter how hard they try. The only drawback of Bitcoin is that it is not considered as money, and has little utility.
Featured image by pixabay.
