Member Article

CBDCs Are Inevitable But Won’t Replace Crypto

“The recent experiment in France to test out the possibilities of a central bank digital currency (CBDC) shows the huge potential of CBDCs and means they have moved another step forward towards mainstream adoption,” said STICPAY’s Customer Service Director, James Bay.

“However, it is important not to confuse CBDCs with cryptocurrencies. Although both use Blockchain technology, CBDCs are essentially digital versions of fiat currencies issued by a country’s central bank, whereas cryptocurrencies are decentralised methods of payment that operate outside of the traditional banking system.

“Although there has been talk of a potential need for a global cryptocurrency, that talk is mainly coming from countries like America, which is used to the global financial supremacy of the dollar. The whole point of cryptocurrencies is to decentralise finance and remove it from the influence of major countries or individuals, therefore a global cryptocurrency would almost defeat the purpose of cryptocurrencies.

“Having said that, Bitcoin is by far the largest and most successful cryptocurrency to date and is effectively a global benchmark, however every cryptocurrency is a global cryptocurrency by its very nature.

“CBDCs will have their place so long as they are limited in size in the way fiat currencies are, i.e. you can’t print an unlimited amount of physical dollars without huge repercussions on the value of the currency and the same would need to be true of a digital dollar.”

This was posted in Bdaily's Members' News section by Heather Astbury .