In his recent interview, Binance CEO proposes that a central bank digital currency can pose a serious threat to top digital asset Bitcoin. But a better alternative can replace it, which is a good thing for the crypto industry.
In an online interview with Jeff Roberts, Fortune senior writer, Binance chief executive Changpeng Zhao shares his views over the development and launch of digital yuan. According to Zhao, the crypto members will welcome any digital currency or blockchain that would assist in recognizing crypto potential and awareness around digital assets and cryptocurrency. Currently, various banks are making significant efforts to launch central bank digital first, but in this race, most CBDCs will have some limitations and weak points, but with time they would evolve into a better currency.
Centralized Nature of a CBDC
Zhao further states that Bitcoin has the freedom and is not controlled by any third party. But all of CBDCs are controlled and centralized which cannot replace Bitcoin in any case. But if a government rolls out an open cryptocurrency like Bitcoin, it will be then a serious threat for Bitcoin. According to Binance’s CEO:
“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 a better Bitcoin alternative will be a perfect thing for the crypto space as it is more advanced and faster than Bitcoin. By using an analogy, he compares it with a web language when old an old language HTML4 is replaced with a new language HTML5.
The host asks Binance CEO whether he has a plan to launch a yuan-based stablecoin. Zhao adds it would not currently have a plan at all and says Chinese authorities make it difficult in moving “capital flight from China.”
Burkhard Balz, a board member of Germany’s central bank, says if the digital Euro uses as a store of value, it would also threaten the financial system.
The United States, on the other hand, currently has no plan to roll out a digital US dollar while China is close to make this dream real as it has launched various pilot programs.