Impact of a US Digital Dollar on Crypto?

[Poker Player]

There's been a lot of talks about the Federal Reserve's plans to develop a Digital Dollar in order to phase out paper money for good. The US is aware that China has launched a CBDC of its own, leading it to act fast in order to maintain its grasp on the global economy. I wonder what would the impact of a Digital Dollar be on crypto itself? Knowing that people prefer convenience on top of security/reliability/decentralization, it's likely the majority will "ditch" crypto in favor of a government-backed digital currency.

I believe there will be two consequences. The first is that people who are now still reticent about cryptocurrencies will stop seeing them as something strange, because after all, their government will have created one. The second has more to do with what you say, because it is normal that most people prefer a currency backed by their government than by a company, but there is one currency out of all those called crypto that is essentially different and that is the Bitcoin. I think many people will understand that having Bitcoin is like having digital gold and that it is something that appreciates over time as opposed to CBDCs that will depreciate over time.

Maybe I'm biased but I think Bitcoin will be the winner.

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[Nivia1st]

like CBDC, digital dollars will not affect the crypto market. I'm even sure that it's not a crypto coin and can't be called a stablecoin either. the technology used is clearly centralized, and that's why digital dollars are not crypto. something that is not crypto will not affect the market. People are already aware of it all so even if it were to be launched today, the crypto market would not react.

[robattfield]

like CBDC, digital dollars will not affect the crypto market. I'm even sure that it's not a crypto coin and can't be called a stablecoin either. the technology used is clearly centralized, and that's why digital dollars are not crypto. something that is not crypto will not affect the market. People are already aware of it all so even if it were to be launched today, the crypto market would not react.

I fully see its impact on the cryptocurrency market as well as other financial markets. As far as I know, it is like a national bank's acceptance of crypto market products. Both the US and China understand that it affects the currency itself and the development plan of the country. So let's wait and see what happens with CBDC products.

[Abiky]

I'm not expecting a US CBDC to offer advantages over crypto. They won't offer lower transaction fees, or a private key based system allowing sole ownership and control over funds to end users. They will not adopt a hard deflationary model, which could qualify their CBDC as an inflation protected asset. They won't implement a gold standard whereby their CBDC can be exchanged for precious metals. There won't be high interest earned by staking CBDCs as there is with crypto.

The approach regulators and the state makes to CBDC rules out every avenue which could allow them to be competitive in global markets. In an era where social credit and state surveillance are concerns, CBDC could be viewed as extensions of these programs, which I think most would prefer to avoid.

CBDC will have a difficult time to overcome the many obstacles and skepticism most will have towards it.

If it is pegged to the dollar, CBDC might be used as a stablecoin in countries like venezuela, turkey and argentina which could help residents to avoid inflation. That might be one area it could have real world application. Although given the preference for regional lockouts where video games made in japan can't be played in the USA, as an industry standard, it is possible that may not be an option outside of forex which already exists.

I think the Digital Dollar will benefit banks and governments more than it'll benefit individuals themselves. The end user will enjoy convenience/ease-of-use, but that's it. Privacy will be long gone as the US government will have a complete view of the digital ledger. What kind of impact will the launch of a US Digital Dollar have on crypto, is yet to be seen. Either decentralized cryptocurrencies experience greater adoption because of the Digital Dollar or all the other way around.

It really doesn't matter as long as crypto stays true to its roots. With long-term preservation of decentralization and censorship-resistance, we might be able to see major cryptocurrencies living alongside digital Fiat for generations. Who knows how a full-fledged digital economy will look like in the future? Just my opinion

[RealMalatesta]

like CBDC, digital dollars will not affect the crypto market. I'm even sure that it's not a crypto coin and can't be called a stablecoin either. the technology used is clearly centralized, and that's why digital dollars are not crypto. something that is not crypto will not affect the market. People are already aware of it all so even if it were to be launched today, the crypto market would not react.

I fully see its impact on the cryptocurrency market as well as other financial markets. As far as I know, it is like a national bank's acceptance of crypto market products. Both the US and China understand that it affects the currency itself and the development plan of the country. So let's wait and see what happens with CBDC products.

That is the biggest difference. If you are reaching to a level where it would be beneficial for the fiat world, as much as the crypto world then I would totally understand the difference. But, if we are talking about something that is beneficial for only crypto world then it can't be too successful in the long run. So, in order for CBDC to succeed, we need to get a lot more fiat investors to get into them as well and make it a hyped and wanted thing.

Obviously, we will have a lot of people who are going to be great about this but that doesn't mean that the amount of people who are interested based on the population but it is based on the interest shown. 1 person showing 100 amount of hype is better than 10 people showing 50 total.

[SirLancelot]

like CBDC, digital dollars will not affect the crypto market. I'm even sure that it's not a crypto coin and can't be called a stablecoin either. the technology used is clearly centralized, and that's why digital dollars are not crypto. something that is not crypto will not affect the market. People are already aware of it all so even if it were to be launched today, the crypto market would not react.

CBDC have an effect to crypto but it's minor that we almost not feel it but for the usdt? We are not sure if the effects will be the same as CBDC or not because we know how influential USA was because they are the supplier of dollar and we saw how big the demand of usdt by basing on its volume and other statistics.

CBDC and usdd are cryptos because they run on the blockchain and cryptos main technology is also blockchain. Their value is also stable because they are based on the local currencies so it's safe to call them stablecoins. If stocks and others that are not cryptos can affect cryptos, how much more these digital currencies that are very close to being a crypto?

[Silberman]

There's been a lot of talks about the Federal Reserve's plans to develop a Digital Dollar in order to phase out paper money for good. The US is aware that China has launched a CBDC of its own, leading it to act fast in order to maintain its grasp on the global economy. I wonder what would the impact of a Digital Dollar be on crypto itself? Knowing that people prefer convenience on top of security/reliability/decentralization, it's likely the majority will "ditch" crypto in favor of a government-backed digital currency.

By the time all countries have their own digital currencies, it's likely governments will become more oppressive against crypto/Blockchain tech. We're still a few years away from seeing a Digital Dollar in circulation, so there should be nothing to worry about at least in the time being.

Thoughts?

Without a doubt we are going to see the day in which most countries will have their own digital currency, but it does not really matter, as long as they keep creating their currencies under the same economic principles then we are going to keep seeing huge inflation and economic crises that only get worse and worse, so even if governments increase the oppression against bitcoin, it will still remain as an alternative to their fiat system, as there will always be people like us that can see beyond their lies and if possible will avoid to use those digital currencies as much as we can.

[Agbe]

The introduction of and lunches of Bitcoin has awaken most Countries to lunch their own digital currency.

That means in the forthcoming generation (s) there will be no paper money for transactions, because everything will be done online and technology is gradually taking over the international system.

Countries like Nigeria and British have already lunch their E-Currencies (Reserve) https://www.bankofengland.co.uk/research/digital-currencies

With this, you can confirm that nations in the world will soon use Digital currency for smooth and easy transactions.

The main problem that will be faced by most Countries is bad network.  Because the third world countries are still suffering from that..

[Abiky]

Without a doubt we are going to see the day in which most countries will have their own digital currency, but it does not really matter, as long as they keep creating their currencies under the same economic principles then we are going to keep seeing huge inflation and economic crises that only get worse and worse, so even if governments increase the oppression against bitcoin, it will still remain as an alternative to their fiat system, as there will always be people like us that can see beyond their lies and if possible will avoid to use those digital currencies as much as we can.

Government-issued digital currencies are inevitable, as banks don't want to lose a piece of the pie. When launched, I think governments will become more aggressive against crypto in order to force people to use their currency. Even in a democratic country like the US, it's possible the government will turn against crypto to help boost the adoption of the Digital Dollar. Crypto will still remain as an alternative to Fiat, but most people will prefer CBDCs because of convenience.

How everything will turn out to be in the future is certainly a mystery to all of us. As long as decentralization prevails, nothing else matters. Just my opinion

[Cryptions]

I see CBDC very worrying what comes to "traditional" cryptocurrencies. Governments are going to regulate cyrptos to the death and take market share easily.

They don't have to say it, but governments can use for example "airdrop" to make their CBDCs the most held crypto in the country/world with a push of the button... just create "wallets" for everyone based on for example social security numbers, etc., and airdropping a few crypto dollars to every citizen.

In a such scenario, what are the ways for Bitcoin and alts to compete? ...and ultimately there are no rooms to compete because of regulations, you need to be a bank to be allowed to exchange etc cryptos. We're not yet there, but dreams of wide adpotion will eventually turn against the whole crypto community. Let's have fun as long as it's possible, and create cryptos that are REALLY decentralized and impossible to regulate. That's the only way to survive in the long run. Trust me.

[Zilon]

There will be no practical difference between dollar CBDC and the already existing Usdt in the crypto market. Both after all are centralized and will only represent the exact value of the paper dollar since the both are tied to the exact fiat value of the corresponding digital asset.

The only concern for digital dollar will be the stricter regulation when comparing it to Usdt. But there will be no influence whatsoever of this CBDC dollar on crypto since it's not decentralized

[awik p]

There will be no practical difference between dollar CBDC and the already existing Usdt in the crypto market. Both after all are centralized and will only represent the exact value of the paper dollar since the both are tied to the exact fiat value of the corresponding digital asset.

The only concern for digital dollar will be the stricter regulation when comparing it to Usdt. But there will be no influence whatsoever of this CBDC dollar on crypto since it's not decentralized

dollar cbdc is nothing to worry about in the development of cryptocurrencies. Until now, cryptocurrency is still decentralized, and as long as it is maintained without government intervention, crypto will remain on track. Moreover, until now in crypto we are more popular USDT than CBDC dollars, so USDT stable coins are the most widely used by investors or traders with various respective goals. here highlight a free decentralized system. so even if the country makes its digital currency, I don't think it will affect crypto

[tbterryboy]

Government-issued digital currencies are inevitable, as banks don't want to lose a piece of the pie. When launched, I think governments will become more aggressive against crypto in order to force people to use their currency. Even in a democratic country like the US, it's possible the government will turn against crypto to help boost the adoption of the Digital Dollar. Crypto will still remain as an alternative to Fiat, but most people will prefer CBDCs because of convenience.

How everything will turn out to be in the future is certainly a mystery to all of us. As long as decentralization prevails, nothing else matters. Just my opinion

I would guess that it would have the reverse impact instead. Governments are already not that much against crypto right now, and places like the USA are supporting them enough, hell Coinbase became 100+ billion dollar company in stock market because of this. If the digital dollar comes out, then they will want people to use crypto even more, so that they would use digital dollars as well.

This would be the door that connects government and crypto together, and include banks in this one as well. So, you could have a "crypto-like" thing in your bank account, making it easier to deal with crypto directly under the supervision of the government, they will certainly want that.

[Abiky]

I see CBDC very worrying what comes to "traditional" cryptocurrencies. Governments are going to regulate cyrptos to the death and take market share easily.

They don't have to say it, but governments can use for example "airdrop" to make their CBDCs the most held crypto in the country/world with a push of the button... just create "wallets" for everyone based on for example social security numbers, etc., and airdropping a few crypto dollars to every citizen.

In a such scenario, what are the ways for Bitcoin and alts to compete? ...and ultimately there are no rooms to compete because of regulations, you need to be a bank to be allowed to exchange etc cryptos. We're not yet there, but dreams of wide adpotion will eventually turn against the whole crypto community. Let's have fun as long as it's possible, and create cryptos that are REALLY decentralized and impossible to regulate. That's the only way to survive in the long run. Trust me.

Exactly. The launch of CBDCs will put crypto to the test as governments increase regulatory pressure. By encouraging the use of government-issued digital currencies, most people will have no need to turn to crypto as an alternative payment system. A Digital Dollar would be as fast and cheap to use as crypto (probably even better) with added convenience. Only those who care about their privacy or want to escape from the clutches of central banks and governments alike will use crypto for day-to-day payments.

One thing for sure is that increasing regulations will only do more harm than good for the mainstream adoption of crypto/Blockchain tech. We should expect constant opposition from governments in order to force people to use CBDCs. Ultimately, it's all about decentralization. As long as decentralization wins, we'll have nothing to worry about. Just my thoughts