Coinsillium CEO considers CBDCs a “small niche” compared to Bitcoin, other cryptocurrencies

The development of central bank digital currencies (CBDCs) is gaining momentum, but Coinsillium CEO Eddy Travia is not worried about their impact as he believes they fail to give users an advantage over existing private crypto alternatives.

Coinsillium is an open finance operator specializing in blockchain technology, particularly non-fungible tokens, which the firm predicts will soon include wider commercial uses, such as for ticketing and computing purposes.

According to the American think tank, the Atlantic Council, 11 countries have launched a CBDC project, 14 are running pilots, 26 are actively developing and 47 are researching the concept.

Despite that, the issue remains highly divisive; arguments against include how they can reduce privacy and the risk of cyber attacks at a national level.

Second fiddle to Bitcoin

Travia spoke to CryptoSlate about the push for CBDC and the accompanying restrictions on crypto, saying that political motives are often unfairly influenced by negative media coverage of digital assets – something that seems to be gaining more visibility.

This phenomenon can affect the thought process of policy makers, especially how some may view the industry as a snake pit to be legislated against or countered with CBDCs.

Travia postulated that the push for CBDCs addresses the need to develop and future-proof money while offering a strong degree of control – which is not the case with private cryptocurrencies.

“They’re looking at CBDCs because, again, CBDCs are something they can control and they feel they can impose certain rules.”

But in a comment to China’s CBDC, the Coinsillium CEO said the project is “not doing very well” because existing and established payment options, such as Alipay or WeChat Pay, are very similar to the digital yuan from a user/front-end perspective. And so it makes little difference to consumers.

With no “clear advantage” over private cryptocurrencies, Travia concluded that it will only play a “small niche” in the future of money.

“In that world of thousands of cryptocurrencies, I think CBDCs have a very small niche to play because, where is the clear benefit for consumers?”

An advantage may, however, be in the form of competition between central banks and retail banks, which Travia sees as potentially positive for consumers.

An Orwellian nightmare

At the more extreme end of the scale, there is growing concern about CBDC as a dystopian tool. For example, Shapeshift CEO Erik Voorhees, speaking on the gm podcast in February, called them an Orwellian spy surveillance nightmare.

This problem was not helped by Bank of International Settlements (BIS) chief executive Agustin Carsen, who recently said that the “soul of money” belongs to trust, and only central banks can be trusted.

Like Travia, Voorhees pointed out that CBDCs are repackaged fiat currencies with no discernible benefit to users. Moreover, they are philosophically opposed to basic cryptocurrency principles such as decentralization, transparency and trustlessness.

“No one who is into crypto likes CBDCs. No one who understands the value of cryptocurrency likes CBDCs at all.”