Viewpoint: CBDCs threaten stablecoins, not Bitcoin

CBDC do not necessarily threaten decentralized cryptocurrencies directly; rather, they aim to mitigate risks associated with stablecoins. This was stated by Mikkel Morch, CEO of the crypto fund ARK36, as reported by Cointelegraph.

The executive explained that the use cases and value proposition of decentralized digital assets “often go beyond simple transactions.”

The financier referred to the speech by the head of the Fed Jerome Powell, in which he allowed “the coexistence of well-regulated private stablecoins and a digital dollar.”

Morch expressed confidence that a similar approach could be adopted by other countries, notably Singapore. In his view, the introduction of CBDCs would “facilitate the spread of non-sovereign cryptocurrencies and blockchain technologies.”

The latter does not negate the prospect of competition between “stablecoins” and national digital currencies, he added.

“CBDC could reduce the role and demand for stablecoins, provided there is a market for the latter. This applies more to the United States than to Singapore,” Morch explained.

Recently, Sopnendu Mohanty, expressed strong skepticism about the value of private cryptocurrencies. He forecast the emergence of a government-backed alternative within three years.

The CEO of the ARK36 crypto fund linked the remarks about the “ruthless” attitude of central banks toward any “bad behavior” by participants in the crypto industry to the Terra collapse and to the liquidity problems of Three Arrows Capital. The latter is registered in Singapore.

As reported, SkyBridge Capital’s Anthony Scaramucci took a philosophical view of these episodes. The financier said that during periods of “crazy money” in the past, young players in the sector also “lost their heads.”

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