From "rejecting bitcoin" to conducting a lot of research on the advantages and disadvantages of central bank digital currency (CBDC), the change in attitudes of central banks towards digital currency is very huge. Global leaders and policy makers have been raising awareness of the CBDC.
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This is undoubtedly driven by Facebook's announcement of the Libra project and subsequent claims by China to develop digital renminbi. But let's face it, CBDC is not similar to Bitcoin. As Meltem Demirors of CoinShares puts it, "Bitcoin and CBDC are not on the same channel."
In essence, the CBDC is a digital form of the legal currency of a particular country or region and is issued and regulated by the country's competent monetary authority. In short, the concept of CBDC is centralized, while the concept of Bitcoin is decentralized.
In a recent webinar hosted by Grayscale Investments, the company's founder and CEO Barry Silbert said of the difference between CBDC and Bitcoin:
"I can assure you that when any central bank actually launches a CBDC, they will not limit the supply of this digital currency. Central banks in all countries like printing money, and I also believe that they will absolutely require users to use and participate in existing The financial system. Therefore, it is clear that it will be affected by all related fees and restrictions. "
What is the value of CBDC?
Hilbert believes that CBDC has verified the value proposition of digital currencies.
"It does provide some level of protection for some innovations in the private sector. If any of these banks really allows it to land, all banks will do it. At some point in the future, we may see 80 Kind of different CBDC. "
The executive at Grayscale went on to say that if the CBDC came out, it would trigger "a lot of investment and upgrades in the financial system." He added:
"Basically, every financial institution must be able to securely store, store, and trade CBDCs. Guess what your built-in infrastructure is. The same infrastructure can be used for non-CBDCs like Bitcoin."
Central Bank continues to promote CBDC work | Source: Bank for International Settlements (BIS)
According to a survey by the Bank for International Settlements (BIS), in 2019, 80% of central banks performed work related to the development of CBDC, compared with 70% in the previous year. 66 central banks around the world participated in the survey called “Impending arrival – a sequel to the survey on central bank digital currency”.
From the Google Trends Chart of CBDC, we can see that in the past year, the search volume for CBDC has been steadily increasing.