Changpeng Zhao, the enigmatic chief executive officer of Binance, believes a central bank digital currency that’s designed well enough could become a threat to the leading cryptocurrency Bitcoin. In a video interview with Fortune senior writer Jeff Roberts, Binance CEO was asked how the People’s Bank of China’s digital yuan initiative would affect the crypto industry. CZ responded that any blockchain or digital currency would be good for the industry overall as it legitimizes digital assets and broadens awareness.
“CBDCs are likely to be more restrictive initially.”
Binance CEO added that while there is currently a race between major countries to launch one, most CBDCs are likely to be more restrictive initially but will evolve over time. When asked directly about the threat to Bitcoin, Zhao responded that very few CBDCs would have the same freedom as Bitcoin, and they would be highly centralized and controlled. “If a government is pushing another cryptocurrency that’s even more open, more free, has fewer restrictions than Bitcoin, and is faster and cheaper to use, that would threaten Bitcoin. But that is good for the industry. It’s just something better than Bitcoin and would replace it,” Binance CEO added.
Central banks across countries experiment with CBDCs.
As reported earlier, Japan’s central bank had revealed that it would start experimenting with a central bank-backed digital currency starting next year. Central banks in many countries have expressed interest in CBDCs, and many of them are working actively on the same. The People’s Bank of China is all set to become the first major nation to launch its national digital currency. PBoC has been working on its national digital currency, dubbed DCEP, for the last five to six years and is now very close to issuing it to the general public.