Why CBDCs Are Explosive Events for the Crypto Space

In recent years, central banks have been hinting that they are working on CBDCs. Especially when Crypto such as Bitcoin and Ethereum were labeled as threatening by these countries, China and India have released updates on CBDC.

At the same time, discussions on the possibility of a CBDC have also recently begun in the US government,CBDCs are becoming a hot topic。

The frenzy for central bank-backed digital currencies is worrisome for crypto users without government backing, when one considers the possibility of eliminating Crypto in favor of CBDC prosperity.

In the past, many government officials insisted that CBDC would be created to replace Crypto, as existing Crypto could pose a threat to CBDC.

Recently, US Federal Reserve Chairman Jerome Powell pointed out that although the United States has not yet decided whether to launch a central bank-based digital currency in the short term, the integration of the two may render digital currencies such as Bitcoin and other stablecoins obsolete.

Although the phase-out of Crypto such as Bitcoin has been extremely ineffective for many years, in the future,As the implementation of CBDC will put pressure on the Crypto industry, the demise of Crypto such as Bitcoin may not be surprising。

So does billionaire investor Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund. Back then, he asserted that gold, a thriving alternative store of value, was also having a rough time at the time.

Ray Dalio writes "Let's look at the war years of the 1930's, because cash and bonds are very bad investments relative to other things, there is a tendency for people to invest in other things, and then the government outlaws them , they outlawed gold, which is why banning Bitcoin is also possible.”

At the same time, with the high usage of crypto assets such as Bitcoin and Ethereum, many proponents doubt that users will easily resist Bitcoin and buy a centralized digital currency.

Ray Dalio believes that the inability of governments to control demand and supply levels will make Bitcoin a threat again, which is once again tenable.

“Every country cherishes its monopoly position in controlling supply and demand. They don't want to put other money into operations or competition because things could get out of hand. ’ points out Ray Dalio.

With China recently recording 20 million wallet users conducting transactions worth approximately $5.4 billion with its digital yuan, it is clear that there is a market for stablecoins.

The original text comes from zycrypto, compiled and organized by Blockchain Knight, the English copyright belongs to the original author, please contact the editor for Chinese reprint.

The original text comes from zycrypto, compiled and organized by Blockchain Knight, the English copyright belongs to the original author, please contact the editor for Chinese reprint.