Kevin Helms
A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.
Binance CEO Sees No Threat to Crypto from Central Bank Digital Currencies – Says CBDCs Will Validate Blockchain Concept – Bitcoin News Regulation
The CEO of cryptocurrency exchange Binance does not see central bank digital currencies (CBDCs) as a threat to cryptocurrencies, such as bitcoin and ether. “It will validate the blockchain concept so that anyone who still has concerns about the technology will say, ‘Okay, our government is using the technology now,'” he said.
CZ sees no threat to crypto from CBDCs
Binance CEO Changpeng Zhao (CZ) said on Wednesday that he believes central bank digital currencies (CBDCs) are not a threat to cryptocurrencies, such as bitcoin (BTC) and ether (ETH), Reuters reported.
According to the Bank of International Settlements (BIS), nine out of 10 central banks are exploring launching their own digital currencies. The Atlantic Council’s CBDC tracker shows that 105 countries are currently exploring central bank digital currencies.
Zhao was asked during a press conference at the Web Summit in Lisbon whether CBDCs could pose a threat to Binance and cryptocurrencies, such as bitcoin and ethereum. He answered:
Is it a threat to Binance or other cryptocurrencies? I do not think so. I strongly believe that the more we have, the better.
He emphasized that blockchain technology should be available to CBDCs and adopted by governments.
The Binance CEO said:
It will validate the blockchain concept so that anyone who still has concerns about the technology will say, ‘Okay, our government is using the technology now.’
“So, all these things are good,” he continued, adding that CBDCs would still be different from native crypto.
Crypto’s correlation with the stock market
The Binance CEO also mentioned that cryptocurrency has been highly correlated with the stock market. However, bitcoin’s volatility recently fell below the Nasdaq and S&P 500, according to crypto data provider Kaiko.
Zhao, whose company invested $500 million in Twitter when the social media platform was acquired by Tesla CEO Elon Musk, explained:
In theory they should be inversely correlated, but today they go the same way, mainly because most people who trade crypto also trade stocks.
“When the Fed raises interest rates and the stock market crashes, they want more money, so they sell crypto. This is because the user base is still very highly correlated,” the executive concluded.
Do you think central banks’ digital currencies pose a threat to cryptocurrencies? Let us know in the comments section below.
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