CBDCs, not crypto, will become the cornerstone of the monetary system
According to the Bank of International Settlements, "Anything that crypto can do, CBDCs can do better." In a 42-page chapter of their 2022 economic report, they say there is room in the future for crypto's underlying technical features, but not for cryptocurrencies themselves.
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This is actually great news for cryptocurrency! CBDC's would mean that crypto has an easier time interacting with fiat currencies. Right now you have stablecoins, but they are not without their own challenges and risks. CBDC would allow you to use fiat directly in smart contracts etc. Decentralized exchanges would also allow you to convert to/from fiat without any 3rd party involved.
Yeah, but it won't be decentralized. It'd pretty much just be digital fiat. Right?
What I understand is that it's really digital tokens, so you should be able to lock them into an ethereum contract for example. Of course the token itself it will never be decentralized, but it might give easier interfacing with the decentralized ecosystem.
The bridge between fiat and crypto now still poses a major issue, always passing through exchanges and their fees. So let's hope this is the bridge we are looking for.
The main argument here is that crypto cannot fulfill the role of money because "costly transactions and scalability restrictions lead to the crypto world splitting into competing blockchains and ecosystems." The central banks argue that in fact crypto's decentralization leads ultimately to fragmentation. And that, the more people who jump on the bandwagon the worse cryptocurrencies will perform. While there CBDC solution has a "the more the merrier" outcome built in.
Its very interesting!
Great strategy!
That's a scary thought. And it sounds about right — innovation happens, then the powers that be get their grubby paws on it and use it to their own ends.
Pretty sure this completely negates the main benefit of crypto — i.e. decentralization. If we're not putting the power in the hands of the people, then what is the point?
By people do you mean the owners of Binance?
They blocked transactions at the moment everyone needed. Is that decentralization?
Binance is of course a centralized institution. There are plenty of decentralized exchanges out there, such as Uniswap, Sushiswap, 1inch, etc.
The main drawback of these decentralized exchanges is that they currently cannot trade directly using fiat.
As I stated in another post here, if the central banks really tokenize their fiat, then those tokens could be used in ethereum (or other) smart contracts, and so you could start using fiat directly in decentralized exchanges.
So in my opinion, a tokenized fiat is actually great for the cryptocurrency ecosystem.
Agreed. I'm just saying it's supposed to be for the people.
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This comment was deleted 3 months ago.