Are CBDC’s A Threat To Crypto?

Let’s talk about Central Bank Digital Currencies!

There’s a lot of fear around CBDC’s. I, myself, have heard comments such as

‘The big banks can’t be trusted’ 

‘CBDC’s will destroy cash forever’  

‘This will give governments way too much control’ 

‘We’ll lose our anonymity’ 

Plus many more.

And let’s be honest, these fears are not unfounded.

Having said that, I don’t believe CBDC’s are a threat to decentralised crypto. And I’m going to share a few reasons why.

But first….

What are they? 

CBDC’s are centralised, government-backed currencies that are issued by a bank and pegged to a country’s fiat currency. (And if the words ‘centralised’ and ‘ government-backed’ have your spidey senses tingling, you’re not alone.)

Cryptocurrencies are a threat to the traditional banking system. For decades we’ve been at the mercy of these institutions and, not surprisingly, they want to keep it that way. But in 2009, the game changed forever with the launch of Bitcoin. It was a brand new way of transacting that paved the way for the plethora of cryptocurrencies we see today.

And the banks? They took that threat seriously. And CBDC’s are their response.

Does this mean they’ll take over and blow both cash and decentralised crypto out of the water? Highly unlikely. One simple reason for this is, too many people have lost trust.

We’ve all seen where the fiat banking system has landed us, and it’s not good. People have woken up, and we’re seeking alternatives. Once bitten, twice shy.

But what about those who will see CBDC’s as a ‘safe’ way to get into crypto?

Well, it’s true that CBDC’s will appeal to those people, but the flip side is that it also opens the door to digital currencies and might just encourage people to learn more about them.

As for those of us who believe in decentralisation? We’re simply not going to partake.

Institutions that have had a monopoly on the production and distribution of our money want a slice of the crypto pie. This was inevitable.

But do we have to buy it? No.

We’ll always have decentralised options. And there are hundreds, if not thousands of them out there. The train can’t be stopped now. Governments can create their own crypto coins all they like. But it’s not going to end real crypto anytime soon.