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Are CBDCs kryptonite for crypto?

Published 04/06/2022, 09:58 AM
Updated 04/06/2022, 10:00 AM
Are CBDCs kryptonite for crypto?

Central bank digital currencies digital currencies backed by a central bank have received renewed interest with the United States President Joe Bidens Executive Order on Ensuring Responsible Development of Digital Assets. Proponents of CBDCs argue that widespread adoption will promote financial inclusion, expand public access to safe money, improve the efficiency of payments and more.

But their rationale remains tenuous. Many analysts and practitioners increasingly view CBDCs as fundamentally at odds with the purpose of cryptocurrency, which is to provide a secure, decentralized peer-to-peer mechanism for transferring funds. And the hypothetical benefits of CBDCs remain hypothetical no evidence exists yet that suggests any advantages over other examples of distributed ledger technologies in financial services, especially given the new risks they pose.

The status of CBDCs worldwide

Bitcoiners have launched a campaign against CBDCs, warning that they allow the government to control what you spend money on.

Evaluating the potential benefits

CBDC proponents cite numerous advantages, but anything a digital dollar can do, crypto can do better.
CBDCs are designed to attack crypto and shore up the power of central banks, according to critics.

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