Central bank digital currencies (CBDCs) pose no threat to cryptocurrencies, the head of the planet’s largest crypto exchange said Wednesday (Nov. 2).
Rather, said Binance CEO Chanpeng Zhao, CBDCs would give more validity to blockchain technology and more credibility to crypto, Reuters reported.
“Is it (CBDC) a threat to Binance or other cryptocurrencies? I don’t think so. I very much think that the more we have, the better,” Changpeng Zhao said during a news conference at the Web Summit tech conference in Lisbon.
Zhao added that the blockchain technology that powers cryptocurrencies should be available for CBDC and embraced by governments.
“It will validate the blockchain concept, so that anybody who still has concerns about the technology, will say: ‘OK, our government is using the technology now,’” he said.
“So, all those things are good,” Zhao continued. He told reporters that CBDC would be different from native crypto as “cryptocurrency is a deflationary asset.”
Zhao’s comments came two weeks after a report by the Bank for International Settlements (BIS) and Hong Kong Monetary Authority detailing how CBDCs can work in tandem with private stablecoins. The study — called Project Aurum for the Latin word for gold — shows how the two digital currencies can work in tandem to guarantee privacy and safety.
Read more: Study: CBDCs, Private Stablecoins Can Work Together
“Project Aurum has made a number of ground-breaking achievements,” the study said, adding “we have no doubt that the Aurum prototype will catalyze and inspire the global quest for the most suitable rCBDC [retail CBDC] architecture.”
Meanwhile, central bank digital currencies are taking off in China while the U.S. still debates the digital dollar, PYMNTS noted in late October.
People in China have spent more than $14 billion worth of digital yuan, according to the People’s Bank of China, a number that represents 360 million transactions made at some 5.6 million merchants in 15 provinces.
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