Over the years, central banks began to change their minds and slowly began to suggest the possibility of creating their own digital currencies. The avalanche of news began shortly after the governments of these countries identified independent digital currencies, such as BTC and ETH, as a threat. Among the big global players, let’s name China or India, and recently there are more and more news from the USA, where the government has started talks about a possible digital currency.
CBDCs are becoming a hot topic
The madness in the market for digital currencies, supported by central banks, is becoming alarming for independent users of cryptocurrencies. Especially when we consider the possibility of eliminating some currencies in order for others to prosper. In the past, many government officials have insisted that CBDCs be created to replace cryptocurrencies, as these could (according to them) pose a threat to the CBDC.
The chairman of the US Federal Reserve, Jerome Powell, recently noted that although the United States has not yet decided whether to launch a central bank-based digital currency in the near future, the integration of some may lead to BTC and others stablecoins become obsolete.
Can CBDC make BTC unnecessary?
Although attempts to eliminate digital currencies such as BTC have been extremely ineffective over the years, it should come as no surprise that in the future, the force behind the implementation of the CBDC will affect the entire cryptocurrency industry.
This is a similar sentiment shared by billionaire investor Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, when he said gold, as a thriving alternative store of value, is also going through hard times.
“In the 1930s – because cash and bonds were a very poor investment compared to other options, the other options were moved and then outlawed by the government. It outlawed gold, so the probability that BTC will be banned may be quite real. ”
Writes Ray Dalio.
CBDCs are already demarcating their territories
With the increasing acceptance of crypto assets such as Bitcoin and ETH, many of their proponents doubt that perhaps users would simply exchange BTC for some centralized digital currency. This is also Dalio’s second point – about how governments will try to control the level of supply and demand.
“Here BTC is again a threat, because every country values its monopol on controlling supply and demand… They do not want other money to work, because there is a risk that things may get out of control”
With China recently recording 20 million wallet users and $ 5.4 billion in transactions using its digital yuan, it is clear that stablecoins are a very interesting option for the market. However, the question remains how large this market is compared to the market for independent cryptocurrencies.
Stablecoins, Digital Currencies, or BTC…? I assume that all options will find their supporters and fans and will coexist side by side – Which option do you prefer?