The CEO of the Binance cryptocurrency exchange, Changpeng Zhao, believes that digital currencies from central banks can become a real threat to bitcoin.
Zhao said this in an interview, discussing the initiative of the People’s Bank of China (PBOC) to develop a digital yuan and its impact on the cryptocurrency industry. According to the head of Binance, any blockchain and digital currencies in general are useful for the industry, as they increase the awareness of the world population about the latest technologies. He added that now between the countries “there is a race for the championship” for the release of the state stablecoin, so initially such assets will have many restrictions.
At the initial stage, only a few central bank digital currencies will have the same freedom as bitcoin. On the contrary, state-owned stablecoins will have a high level of centralization, and they will be controlled by regulatory authorities. However, over time, the Central Bank’s cryptocurrencies will develop and will be able to compete seriously with conventional crypto assets, including bitcoin.
According to Zhao, if governments launch a more open and free digital currency that has fewer restrictions compared to bitcoin, and if transactions with such a cryptocurrency are carried out faster and cheaper – this could become a threat to bitcoin.
Digital currencies of the Central Bank will contribute to the legalization of the cryptocurrency industry, but at the same time they can become a full-fledged replacement for the first cryptocurrency. When asked whether Binance is going to launch a stablecoin tied to the Chinese yuan, Zhao said that he has no such plans for the near future. He added that China has too many restrictions aimed at preventing capital flight from the country.
Last week, the head of Binance said that the combination of centralized and decentralized finance (DeFi) can also accelerate the development of the cryptocurrency industry