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Bitcoin Can Fall Behind Central Bank Digital Currencies, Says Binance CEO CZ

The Chief Executive Officer at Binance, Changpeng Zhao – often referred to as CZ –  seems to think a central bank digital currency – or a CBDC – with a well enough structural design can become a threat to Bitcoin. 

In a video interview with Jeff John Roberts, senior writer at Fortune, Changpeng was asked his opinion on the digital yuan launched by  the People’s Bank of China, and how it might affect the crypto industry as a whole. To which he responded that any blockchain tech-based digital currency would be good for the sector overall, since it spreads awareness of cryptocurrencies and brings it to the mainstream financial markets – something no virtual currency has managed to achieve so far.

Zhao, who’s company Binance has joined the IAMAI in India to campaign for crypto, added that launching a legitimized CBDC has turned into a competition between the major countries. As a result, right now most CBDCs are likely to be more constrictive, but they will mature over time.

“Good for the industry”: CZ

When CZ was asked to elaborate on the threat to BItcoin CBDCs might represent, he stated that very few CBDCs would have the same decentralized, free design as Bitcoin; instead they would definitely be highly controlled by centralized figures. However, when it comes to a longer term, Changpeng had this to say:

“If there is a government pushing another cryptocurrency that’s even more open, more free, has less restrictions than Bitcoin, and is faster and cheaper to use, then that would threaten Bitcoin. But that is good for the industry, it’s just something better than Bitcoin, and would replace it.”

Additionally, CZ expressed that it wouldn’t necessarily be a bad thing. In fact, the situation would be fairly similar to the web language HTML5 replacing the HTML4.

In the interview, CZ was also asked if Binance had any plans to launch a yuan-based stablecoin that would complement the stablecoins already approved on the exchange. CZ replied that the company didn’t have any intentions like that at that time, since there were very many restrictions regarding capital flight from the Chinese government.

Interest in CBDCs continues to rise

Meanwhile, interest in CBDCs has hiked up in 2020- even though the general opinion on the digital currency is very mixed. For instance, Burkhard Balz– German politician and executive board member of the Central Bank of Germany- recently said that a digital euro, if used as a store of value- could become a threat to the entire financial system.

The United States, on the other hand, does not seem to have any plans of launching a digital dollar in near future. However, Anthony Pompliano– co-founder at Morgan Creek Digital- proclaimed that if it doesn’t act soon, the US will lose to China in the field of CBDCs.

Disclaimer: CoinCrunch.in content is informational in nature and is not meant to be investment advice. Buying, trading or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their due diligence before making any decisions. © 2020 CoinCrunch
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