Changpeng Zhao says CBDCs may become threat to Bitcoin

The CEO of Binance, Changpeng Zhao, has commented on the threat the Central Bank Digital Currencies (CBDCs) may pose to Bitcoin. Zhao told media that while CBDCs may help digital assets to gain credibility with a wider audience, they may also damage the appeal of popular decentralized currencies. The CEO also thinks there could be a race between the major nations to launch CBDCs.

Zhao stated,

“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.”

Why it matters: The coming years will undoubtedly see the launch of CBDCs, however they aren't likely to be designed with the same goals that Bitcoin had when it hit the markets. Most decentralized currencies were created with some amount of anonymity in mind, and were also designed to be limited in amount. Central banks don't want people to have the ability to make private transactions. Bankers also rely on the fact that fiat currency can be created at any time, and in any amount. It is highly unlikely that major governments and central banks will adopt new design goals, and create CBDCs that act as anonymous hard money.