According to Dean Steinbeck, CBDCs could increase awareness about Bitcoin

Dean Steinbeck, co-founder and chief operating officer of Horizen Labs, believes that CBDCs will not have any negative effect on Bitcoin

In 2020, Central Bank Digital Currencies caught the attention of countries around the world as the largest global economies considered creating their own digital currency. But what will be the effect of CBDCs on Bitcoin (BTC) if every country decides to launch one? According to Dean Steinbeck, co-founder and chief operating officer of Horizen Labs, very little will change in the world of BTC.

„We’ve recently seen a number of activities internationally as governments explore the development of native virtual assets,“ Steinbeck explained to Cointelegraph. Steinbeck also holds the position of general counsel at Horizen. „A healthy and robust ecosystem of virtual assets has the potential to enable broader financial inclusion, more efficient markets and so on,“ he added.

In 2020, China took the top spot in the race for CBDCs, making rapid progress toward such an asset.

The U.S. has opted for a more cautious approach, rather than hastily introducing a form of digital money into the market, although it has recently turned more attention to such an initiative.

„It’s hard to say how the growing interest in CBDCs will affect Bitcoin, or cryptocurrencies in general,“ Steinbeck commented, adding:

„Bitcoin has always been about operating outside of government control in a peer-to-peer fashion, so on a superficial level not much will change for those attracted to Bitcoin as a matter of principle. However, it remains to be seen whether governments will seek to crack down on digital assets operating outside of the systems they consider ‚correct‘.“

Bitcoin is a borderless asset managed by people and code, with a value untethered from national currencies. Instead, countries will set the value of their CBDCs to that of fiat money, though the exact specifics remain uncertain at this time. According to Jake Yocom-Piatt, co-founder of the crypto project Decred, CBDCs pose a threat not so much to cryptocurrencies as they do to stablecoins:

„Depending on what actions you will be able to perform with your CBDCs, they could make stablecoins mostly obsolete. If there were too many restrictions on CBDCs, then stablecoins could compete from a flexibility standpoint.“

Dean Steinbeck concluded:

I believe that collective awareness of censorship, among many other variables, bodes well for the future of cryptocurrencies. Wider awareness of the benefits of digital currencies, such as CBDCs, also has the potential to expose more ordinary users to the world of crypto.

Yesterday, France continued testing its CBDC by executing an interbank payment.