Swiss Crypto Valley Association Chairman: Central bank digital currency is the next stage in the development of decentralized finance

Author: Liang CHE

Source: Tweet

Daniel Haudenschild, chairman of the Swiss Crypto Valley Association, said that the central bank's digital currency is the next stage in the development of decentralized finance.

In an interview with crypto media Cointelegraph, he said that there are currently 34 central bank digital currency projects that indicate that the government and traditional finance have recognized the potential of digital assets.

Haudenschild acknowledges that fear of falling behind is the main force behind national innovation. "There is no doubt that the application of digital assets has pushed governments to take action. It is obviously urgent to maintain currency sovereignty in the financial digital era."

For countries that have launched central bank digital currency projects, he pointed out, "Although it is unknown which country will launch the central bank digital currency first, it is certain that the innovation competition and the demand for global finance, cross-border payments and decentralized trust Central banks are pushing for action in this regard. "

Haudenschild also pointed out that in this innovation competition, the real competition is not the competition between countries. "The real challenger will be the digital currency issued by enterprises and organizations that can challenge the central bank's digital currency. Libra is such an example. USDT etc. Other private stablecoins already have high transaction volumes. "According to Haudenschild, private institutions can challenge the sovereignty of the central bank by providing exchange rates that are more favorable than those set by monetary policy.

For Facebook's Libra project, he believes it still has the potential to succeed, but this depends largely on the company's ability to talk to regulators, and Libra is not the only similar project. He mentioned, "Although Libra has been pushed to the global stage due to its relationship with Facebook, millions of projects have proposed legal payment solutions and alternative digital currencies, and they are also waiting for a response from regulators."

He believes that there are some problems with the banknotes issued by the central bank. The existence of counterfeit currency requires the central bank to implement an expensive anti-counterfeiting mechanism. High security requirements increase the cost of inventory management. The advantage of the central bank digital currency is that "the central bank can almost eliminate the cost of a single banknote. This process is almost impossible to counterfeit, and the material management of the token itself has almost no security overhead. In addition, the central bank digital currency can solve traditional financial problems. Flaws, from high international remittance costs to corruption and underground economic phenomena. "

Haudenschild pointed out that the "Belt and Road" initiative proposed by the Chinese government will greatly benefit from digital currencies. Because "this payment infrastructure will eliminate bribery, corruption, theft and other losses throughout the supply chain."

He acknowledged that central bank digital currencies could also be used to circumvent economic sanctions. "Sanctions restrict currency circulation only if traditional settlement mechanisms are used. If alternative settlement mechanisms are used, such as Bitcoin or USD-backed cryptocurrencies, sanctioned countries can bypass their effects. Sanctions only affect compliance People work. "

Haudenschild explained that cryptocurrencies such as Bitcoin “will play a key role in the future of the financial system”. Cryptocurrencies eliminate individuals' dependence on the banking system and guarantee inalienable financial freedom.

Regarding Bitcoin, he said, "It can be said that Bitcoin has become mainstream because it is the most well-known and most traded cryptocurrency and has been around since its establishment. Bitcoin does not need to be used as a transaction medium in daily shopping. It has Different purpose. "

Regarding regulation, Haudenschild believes that the government will increase activities related to cryptocurrency regulations within a year and take faster action if necessary.

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