Digital coins issued by central banks, or CBDCs, will probably affect Bitcoin in some way.
Digital currencies issued by central banks gained popularity worldwide throughout 2020 as all the major economies of the world considered creating their own digital money. But how will CBDCs affect Bitcoin (BTC) if every country introduces its own? Dean Steinbeck, co-founder and COO of Horizen Labs, postulated that the core atmosphere of Bitcoin would remain the same on the surface.
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„Recently there has been a lot of activity internationally with governments exploring the development of their own virtual assets,“ Steinbeck told Cointelegraph. Steinbeck also works as general counsel for Horizen. „A strong and healthy virtual asset ecosystem has the potential for broader financial inclusion, more efficient markets, etc.,“ he added.
China apparently led the charge for CBDCs in 2020 and has continued its pursuit of that asset. The United States, on the other hand, positioned itself more toward precision rather than rushing a digital cash option to market, although it has recently expressed a greater emphasis on a CBDC approach.
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„It is difficult to say how the growing interest behind CBDCs will affect bitcoin, or cryptomonics in general,“ Steinbeck said.
„Bitcoin was always meant to operate outside of government control on a peer-to-peer basis, so in principle, it won’t change much for those who are attracted to Bitcoin. However, it remains to be seen whether governments will start trying to crack down on digital assets operating outside of any system they’ve decided is ‚right‘.
Bitcoin is a borderless asset managed by people and codes, with a value not tied to national currencies. Instead, countries will link the value of their CBDCs to national trust currencies, although the exact specifications remain unclear at this stage. Stablecoins linked to the value of national currencies could be affected by CBDCs in the future, according to recent comments by Decred co-founder Jake Yocom-Piatt.
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„I believe that the collective awareness of censorship, among many other variables, bodes well for the future of cryptomonies,“ Steinbeck said. „Greater awareness of the benefits of digital currency, such as CBDCs, also has the potential to expose more casual users to the world of cryptomoney.
France today continued its testing of a CBDC with a pilot interbank payment.