Bitcoin Forum

With the emergence of cryptocurrencies came CBDC, which means Central bank digital currencies. These currencies are simply the digital version of their corresponding fiat.
Although CBDC also referred to as digital fiat currencies or digital base money is inspired by cryptocurrency, they are not to be confused with cryptocurrency as they are still issued and controlled by the government.
The real question is,
CAN THESE CBDC REPLACE CRYPTOCURRENCY IN THE COUNTRIES WHICH THEY ARE ISSUED?

No, both will not replace each other. The main thing you should know is that the CBDC is absolutely legal, crypto is only possible to be legalized.

Crypto will stay on its own with its volatility, its decentralization. Meanwhile, CBDC is just another form of physical fiat that has been improved, but it doesn't leave its main characteristics as a state currency (under control, unlimited supply, inflation, etc.).

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No, they are two different sides that have different goals. Cryptocurrency to make you free from regulations that shackle your ownership rights, While CBDC is to bind you to all types of ownership and is fully controlled by the Bank, you have taxes, wealth data and all the values contained in it. There is no room for you to avoid the government. Monitoring will always follow you. Here cryptocurrency will always be tried to be removed by the government which continues to prioritize CBDC as a legitimate and recognized digital currency.

No.

What they're trying to replace is their current fiat system and they're just bringing it into digital. If the aim of these CBDCs is to replace cryptocurrencies then they don't even stand a chance.

The country that issuing their own CBDC, they can't just stop the emerging market of cryptocurrencies in their country. And they all knew it and understands that they just can't beat crypto.

Cryptocurrencies would not be replaced by CBDCs. Each have their own respective use cases that the other may not be able to accomplish. They will exist side by side with each other, though the presence of one will not cancel or delete the existence of another.

Cryptocurrencies will always remain supreme when it comes to transactions across borders. CBDCs will function as digital version of the country's currency which may streamline some other financial services within the country. Two complete facets of the economy, I'd say.

Given the decentralized natures of cryptocurrencies, they can never be stopped as long as the crypto itself maintains its decentralization. Also, even if the country itself going full crackdown on cryptocurrency, there is still a way to be able to use or access it.

I believe both of CBDC and cryptocurrency can coexist. What is a more plausible scenario is governments going to strictly regulate cryptocurrency to minimize the privacy/anonymity benefit, it what made them to be able at the very least to control it. Also, cryptocurrencies will be a big thing, surely governments won't miss a thing to tax it.

Neither CBDCs nor cryptocurrencies will be able to replace the other one I think. And they are not aiming to do so too. CBCDs can start becoming a really good alternative to fiat as long as they are developed enough to do so. But this won't be a short process I believe. Because I don't think that we will let fiat currencies go forever so soon. They will still be in our lives until the digital currencies that are developed by governments are ready.

CBDC is backed by the government though. So if they enforce us to use it, people will use CBDC. But it will just replace fiat but not cryptocurrencies because it has a different market. There is not enough information I've read but some say it's using blockchain. Even if it's going to be using blockchain, it's going to be a centralized currency.

But just like in the early days of credit cards, they will airdrop money to your CBDC wallet to make people use it.

Cryptocurrencies will not be replaced by CBDCs. Each has its own respective use cases that the other cannot do. We will exist side by side, although the presence of one will not cancel or abolish the existence of the other. I believe both CBDC and cryptocurrency can co-exist. no need to Remove or replace them will be two supporting factors in the future.

CBDC can't. It's more likely as stable coin rather than cryptocurrency as this CBDC was backed by the government and fiar. It may become a new competitor for the stable coin but it doesn't have a utility use case like the cryptocurrency.

Countries were issuing CBDC as they're aware if the growth of people adopted blockchain and crypto were going so fast and they can't only sit and watch the adoption that is always happening anytime.

You can't make a comparison between CBDC and crypto because both were different. Crypto has been running in various protocols while CBDC aims to digitalized the fiat money to be used by its civilians.

I guess the purpose of crypto and CBDC were different.

also, i believe the rise of interest of creating CBDCs is owed due to pandemic. as governments want to go digital and don't want to use crypto, cbdc is a good option for them to introduce to their citizens their fiat in digital form, so as to avoid or minimise the contact with physical cash. but there's no reason to compare cbdc vs crypto because they are totally different in nature.

no, they are just an alternative venue, for countries that are committed to the growth of their own currency, there used to be a plan for all countries to use one medium of exchange, but only Europe could afford it, and then the UK came out using ponsterling again, and also southeast asia  didn't happen.

Anyday, anytime, I will always opt for the Cryptocurrency. Of it for anything else but for decentralisation. We all know the benefits that comes with decentralized systems as there is moderate distribution that strips off power from one central system. CBDC still works with the principle of centralization, they only just upgraded the system from manual notes to digitised systems. We need more than that.

What I am just worried about is the attention of people and volume that running cryptocurrencies may diverse or somehow will reduce since CBDC will join the party.
Although they have differences there's a chance that people may be more comfortable using those centralized digital currencies than using cryptocurrencies which we all know that is decentralized.

It's what the governments who issued them are trying to do but people who are used to sending P2P will probably shun it. CBDC are literally just digital fiats or just like stable coins to an extent.

The real question here is will government start banning exchanges to operate in their country trading cryptocurrencies and force its people to use CBDC.

You need to understand what definition of CBDC and then you can think can it be compared with crypto
I will give you a link to the explanation of CBDC https://www.investopedia.com/terms/c/central-bank-digital-currency-cbdc.asp

It's only fiat in the digital form and no more. You should not expect a big thing to happen with it dude. It will not become crypto as it's a digital fiat balance controlled by the bank and government, Did you see digital yuan? it's only fiat money in the digital form without any volatility. This may give you  a small insight about whether it can be compared with crypto or not.
The purpose of CBDC to give easiest access to the fiat money in the digital form. This should become a potential competitor for the stable coin or even replace it

OP is probably misunderstanding CDBC for crypto, just understand that the value of cryptocurrency is determined by market supply and demand and not backed by legal entity. However, certain cryptocurrencies may be backed by corporations and this does not undermine the fact that it is mined by users and not printed by the central bank. Looking at the future of our financial system whether centralized or decentralized depends on our users. We are in the midst of a new financial era and we hope that this information can help you choose in favor of a financial approach that benefits you.

We have seen an uprise in the crypto space emanating from the creation of CBDC in various nations and continents respectively. Although, the move is in a right direction but I do not see CBDC replacing the Cryptocurrency, not even in the nearest tech future. I always Will Go for Cryptocurrency every time.

Those CBDC can't replace crypto and never. Crypto was crypto. CDBC = fiat money. They will be legally used in their own territory but that's different with crypto that globally used by so many countries. I think that you can understand this properly.

You should understand what's CBDC first, crypto was not having stable value like CBDC but there's altcoin called stable coin that can be replaced with CBDC once CBDC will be introduced on those countries.
Know the differences. CBDC was also fully regulated while crypto was not.

No, there will be a public/private partnership. Stablecoins like USDC will still exist for DeFi and your Vaccine Passport will hold your CBDCs. You will be able to convert between the two seamlessly in your wallet.

We already have the answers, can CBDC gives you returns if you use them? The answer is no because CBDC is stable coin and equals to FIAT, I'm sure CBDC will meet same fate as Fiat currency cos it has no reason for adoption

Cryptocurrency = increase in value = increase in adoption
Stable coins = zero gains= storing value

As you can see crypto investment makes sense because they gives returns, it's something stable coins and CBDC can't offer

All these central bank digital currencies, I do see them as a joke. Banks were talking bad about cryptocurrencies that are decentralized, now they are rushing to create their own cryptocurrencies and force people to make use of it.

Digital currencies that are being created by banks are still the same thing with the Fiat currencies that we are making use of; So what is the need of having it?

Or do they have plans to stop releasing paper money once they have released the digital currencies? They know very well that it is not going to be possible for us to stop making use of paper money, because there are people who are not interested in Internet or whatever that has to do with digital money.

People still like paper money , and I don’t think all these digital currencies by central banks are going to be able to defeat decentralized cryptocurrencies, bitcoin and other decentralized cryptocurrencies are stronger than whatever the central banks are dishing out.

Since we had already established that CBDC is going to be used by banks and the government to still use the same system as before thru the CBDC, nothing still will change in the future but they may solve one thing like banking the unbanked which is probably their primary goal.

I have read the news today about VISA having an interoperability channel with CBDC (https://www.theblockcrypto.com/post/119117/visa-universal-payment-channel-interoperability-cbdc). VISA and there's of its kind will work side by side with cryptocurrencies because they know they couldn't do anything to stop it.

No. CBDC is the government's version of fiat and use by people in country's where it was issued but it doesnt mean it can replace cryptocurrency.

Crypto can be use as currency and investment because of the price fluctuation while CBDC has a stable price like fiat. Its just shows that even the government create their own digital currency it will have less impact on crypto because they're different and crypto has more edge aside from the opportunity of making money, its not controlled by anyone.

Yes, cryptocurrencies are simply digital currencies that utilize some sort of cryptography.

As far as I know, all CBDCs or planned CBDCs have that element.

But whether or not they are decentralized is a totally different issue. This is the reason why we call XRP a crypto in spite of the fact that clearly it is more of a centralized company than something like bitcoin or ETH.

I don't believe in any digital state currencies. They will still be controlled by the government. The main feature of digital money is decentralisation and uncontrollability from authorities, but digital euros, rubles, yuan will be under control, so it is the same as just non-cash money but on blockchain instead of bank account. I don't think that they will replace crypto until it is forbidden all over the world.

I see this as an opportunity for us to compete fairly and equally with countries around the world. Currency is an effective tool used by the government to manage the people. It is highly unlikely that the government will float or relinquish control of the currency. The Blockchain revolution has forced them to quickly adapt to cryptocurrencies, creating competing CBDCs to regain control. In other words, the release of CBDCs is now only a matter of time.

In any case, states will try to do this. The government of China is now preparing to officially release its digitized yuan. To eliminate cryptocurrency as a possible competitor, they did not come up with anything better than to declare transactions in cryptocurrency illegal.
However, stable coins of states cannot replace cryptocurrencies, because they are only means of payment, and cryptocurrencies provide people with much greater opportunities, including the opportunity to earn money. Therefore, cryptocurrency will continue to evolve despite opposition from governments.

CBDC is centralized whereas cryptocurrency is not. They cannot replace each other simply because they're different from the other. I'm pretty sure CBDCs will have the most adoption, since the world goes around Fiat these days. They're basically Fiat money but digitized for banks' and governments' own benefit. The end user will experience faster transactions and cheaper fees but that's it. Privacy and anonymity will be non-existent in a CBDC. At least, crypto will be there to save the day when people need it the most.

Instead of focusing which type of currency will replace the other, we should focus on making crypto land a better place. Only then, crypto could become a strong contender against the traditional monetary system empowered by central banks and governments alike. I'm fine with crypto being an alternative than a replacement of Fiat as long as it remains decentralized and censorship-resistant. Just my opinion :)