Zhao said CBDCs would benefit the cryptocurrency industry with more options while developing trust in decentralized technology. However, various experts consider that central bank digital currencies allow unprecedented control over the citizens who use them and how they may spend them.
Changpeng Zhao, the CEO of Binance, has changed his position about central bank digital currencies (CBDCs). He recently stated that he does not believe they threaten his company or the cryptocurrency ecosystem.
In addition, Zhao thinks CBDCs would validate blockchain technology, developing trust among those concerned about decentralization. He said cryptocurrencies would benefit if the cryptocurrency industry had more options for its users.
The CEO of Binance pointed out that many would view the adoption of blockchain technology by world governments optimistically. However, he noted that CBDCs differed from cryptocurrencies, highlighting that the latter are deflationary assets.
Zhao explained that anyone who doubted blockchain technology would trust it as their governments use CBDCs.
It is important to remember that Zhao has changed his position on CBDCs over the last year. In 2021, he said they would never allow the same freedom as cryptocurrencies like Bitcoin (BTC) and Ether (ETH). At the time, the business executive commented that most central bank digital currencies would serve to exert control.
Many central banks worldwide currently compete to lead research to implement CBDCs. In that regard, China has been the first country to develop and pilot test its national CBDC.
Although Zhao Views CBDCs Differently, There Remain Concerns about Them
CBDCs allow central banks to exercise unprecedented control over the citizens who use them and how they may spend them. That has led various experts to express their concerns about their massive implementation.
Specialists consider that CBDCs may cause problems for those seeking less government involvement in their finances.
In October, Peter Imanuelsen, a political entrepreneur, said CBDCs might allow governments to control citizens, referring to it as global communism. He stated that a CBDC tied to a digital ID might serve to take measures against ideological dissidents or control personal spending.
Various reports indicate that Turkey plans to launch a CBDC directly linked to a digital ID in 2023. Currently, 15 countries, including China, Russia, Kazakhstan, Thailand, Saudi Arabia, Sweden, and South Africa, are testing CBDCs.
Although the United States is discussing and researching CBDCs, there have been divided reactions to a potential digital dollar.
In May, the Bank for International Settlements (BIS) surveyed 81 central banks in countries representing almost all global economic production. It found that over 90% of financial institutions considered developing a central bank digital currency.
Cryptocurrencies like Bitcoin and Ether have become increasingly relevant in the economic system worldwide. That has led governments that link them to illicit activities to research and develop their national CBDCs. However, serious studies have revealed that criminals prefer using fiat currencies over crypto assets.
Meanwhile, Bitcoin is trading at around USD 21,340 and has accumulated a 3.4% gain over the last 24 hours. While its daily trading volume is above USD 422.31 billion, its market capitalization is about USD 409.70 billion, according to CoinGecko.
By Alexander Salazar
