Strategists and fund managers said that although the central bank’s digital currency is not structurally different from domestic fiat currencies, they will complement cryptocurrencies rather than compete with them.
A survey conducted by the Bank for International Settlements in January showed that approximately 90% of central banks around the world are now developing their own digital currencies, which is different from traditional currencies such as Bitcoin, some of which may be issued within the next three years. As of 5:30 PM IST on June 16, the price of Bitcoin in India was 2.87 million rupees.
Meltem Demirors, chief strategy officer of CoinShares, Europe’s largest digital asset investment company, manages 5 billion U.S. dollars (approximately 10 billion rupees). Complementary, not competitive”. 36,660 crore).
This interview is part of a series on digital currencies at the Reuters Global Market Forum in the past week.
Kevin Kelly, head of global macro strategy at Delphi Digital, a digital asset research company, said that he expects CBDC to improve the traditional monetary system by making it easier to communicate fiscal policy, while at the same time bridging the gap between legal currency and decentralized finance (DeFi) To help the crypto market.
Vytautas Zabulis, managing director of digital asset trading solutions company H-Finance, said that CBDC may provide the preferred method of digital payment without killing existing tokens.
Zabulis said: “I think this is a cleanup of everything that is actually not needed on the market.”
Georgia Quinn, general counsel of digital asset bank and custodian Anchorage Digital, stated that countries with less mature financial systems will be able to use CBDC as a more effective payment and storage mechanism.
Demirors stated that Bitcoin’s value lies in its limited supply compared to the Federal Reserve’s promise to continue printing and spending more dollars.
“In the past 18 months, the Federal Reserve has printed 40% of all U.S. dollars in circulation (which means that the value you own is affected by the U.S. government’s monetary and fiscal policies,” she added.
However, analysts said that countries are still likely to promote their own CBDC and sideline cryptocurrencies.
“Can the U.S. government create its own U.S. digital currency and say that we believe in cryptocurrencies, but only believe in this cryptocurrency? Of course, I think this is definitely possible,” said Todd Cipperman, the managing director of Cipperman Compliance Services.
Everett Millman, a cryptocurrency and precious metals analyst at Gainesville Coins, said that as long as there is interoperability between CBDC and the existing cryptocurrency infrastructure, there will be a middle ground where the two can coexist.
Some central banks, including the Reserve Bank of Australia, are exploring the development of a tokenized form of CBDC on an Ethereum-based platform. The price of Ethereum in India is Rs. As of June 16th at 5:30 pm U.S. Standard Time, 180,000.
© Thomson Reuters 2021