\n
Central bank digital currencies (CBDCs) could replace many existing stablecoins, but not Bitcoin and other cryptocurrencies. This is the opinion expressed by Binance founder and CEO Changpeng Zhao.
\n\n\n\n
\n\n\n\n
Overall, the advent of CBDCs will benefit the crypto industry, albeit with some caveats, he believes.
\n\n\n\n
“Today central banks and governments are telling the masses about blockchain technology and cryptocurrencies. And you know what, you can’t learn about blockchain without learning about Bitcoin. And then you will be introduced to the important fundamental properties of money: scarcity, the freedom to transact, and low fees,” Zhao noted.
\n\n\n\n
Authorities could compel merchants to accept CBDCs fairly quickly, which would spur the adoption of digital wallets and push many to use cryptocurrencies, he believes.
\n\n\n\n
The emergence of a digital form of fiat could also increase inflows to crypto exchanges, Zhao added. He emphasised that CBDCs differ from Bitcoin and some other cryptocurrencies on a fundamental level.
\n\n\n\n
Zhao is convinced that most CBDCs will be inflationary, with restrictions on certain transactions and high fees in use.
\n\n\n\n
He allowed that a central bank might issue a CBDC with limited issuance, unrestricted transactions and low fees. This would reduce demand for Bitcoin in that country, but would not displace cryptocurrency — it would remain a preferred store of value. Zhao reminded that even now a certain percentage of digital gold holders do not regard it as an alternative to currency.
\n\n\n\n
“So perhaps there is no point in comparing Bitcoin and CBDCs at all,” concluded the head of Binance.
\n\n\n\n
At the end of November, Zhao said that cryptocurrencies are not suitable for all investors.