Can Central Bank Digital Currencies Kill Cryptocurrencies ?

[davis196]

The conversation about CBDCs keeps repeating the same old questions.
We've been discussing Central Bank Digital Currencies in the last 3 years, and AFAIK there's no active CBDC in circulation currently.
CBDCs can't kill crypto, but I'm sure that the "average Joe" would embrace CBDCs faster than crypto, because the government stands behind CBDCs, which means that they are "safe and secure" (sounds like a joke to me).
There's no point arguing against the crypto haters and their BS about crypto having no intrinsic value. What is the intrinsic value of fiat?
The crypto haters are projecting the cons of the fiat financial system over the cryptocurrency world.

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[Smartprofit]

You have to understand that the current RBI governor is a political hire to act as a puppet for the government. If the Indian government really cared about experience, they wouldn't let Dr. Rajan resign.

CBDCs can't put a dent on cryptos. Killing is out of question. Cryptocurrencies work in a different way and CBDCs are just a digital representation of fiat currency. It won't be much different than the ways we are using UPI nowadays. Don't worry!

In my opinion, CBDC is one of the elements of a digital concentration camp.  

Will this digital concentration camp be created?  I don't have an answer to this question....  

If there is a trend, then there is an anti-trend.  Since 2000, we have all observed a pronounced trend towards digitalization and virtualization of social society.  However, with the beginning of this decade (2021-2030), an anti-trend began to appear.  There is a feeling that there is currently a slowdown in scientific and technological progress.  Global supply chains for goods and services are collapsing.  

In fact, the global world is collapsing.  Under these conditions, the construction of a global digital concentration camp is slowing down.  

And this gives a chance for the further development of Bitcoin (IMHO).

[BlackHatCoiner]

Can they shut down my full node? Can they shut down the mining farms? Then, they can't kill bitcoin.

In my opinion, CBDC is a very big threat to cryptocurrencies (including Bitcoin and Ethereum). 

Although off-topic, but Ethereum, as centralized as it is, can cooperate with banks to ensure more profit. JP Morgan already owns a crucial part of Ethereum, and with the "development" of their PoS-ed ETH 2.0, it can benefit the financial sector, by a lot.

I can think of Ethereum as a future consensus mechanism, for banks. So, I rather believe CBDCs can be build on top of Ethereum.

[kryptqnick]

As such, CBDCs pose no threat to cryptocurrencies because they don't possess the key features of cryptos: decentralization, free market price formation. So, if anything, CBDCs are competing against fiat as their better, improved and even more controlled by the state forms. However, the policies can make significant impact because while CBDCs aren't likely to attract enough attention under fair competition to surpass big cryptos, things like banning the usage of decentralized cryptocurrencies and only allowing CBDCs could, of course, do that. It can become a problem for countries like India that have shown hostile attitude to cryptos. But overall in the world, I don't think we'll see a strong enough crypto ban and encouragement of CBDCs for that to happen.

[arwin100]

Why it will kill crypto? Does people will go directly into it once government launch it?.

Because for sure what will happen there is their created coin will became alternative for people who use crypto and provably the same with other stable coin crypto users will grab it because they will just think that its a safe haven to them.

[ChiBitCTy]

One of the best examples of central bank digital currencies is the digital Yuan, which will only succeed because it’s in a non-free state. China is always looking for ways to control its people even more so than they already do and the digital yuan is no exception. These currencies face the same issues as traditional fiat currencies which mean they won’t have any advantage above bitcoin besides what it already has, imo anyhow.

[Gozie51]

If referring to Nigeria own situation with e-naira, it won't have any effect on cryptocurrency at all because currently after the CBN said they will introduce digital currency, it didn't push any pulse in the stock market or even the naira. In fact the naira keep sinking daily. Moreover the people are even not very use to cryptocurrency that to talk of digital currency.

[Furious 7]

In this case maybe I'll just laugh now considering there's been a lot of discussion about CBDCs before and the results are still the same they're just under and just like Fiat in modification the results are like that.
So when they say they can kill Crypto then I will only see this as a joke because it would be pointless to say a lot of arguments for something that clearly won't accept Crypto and something that is clearly impossible

[m2017]

I won't talk about all cryptocurrencies, but there's no way that bank digital currencies can kill bitcoin, I'm sure of that. CBDC and bitcoin work on completely different principles and seem to exist in completely different parallel realities. I get the impression that CBDC makers are creating it according to the principles that they are used to in their traditional system, but bitcoin is completely different, and I don't think the banks understand this at all. Indeed, it is difficult to rebuild one's established vision of the world, and therefore, among the bitcoin followers there are very few people from the traditional banking system. Let the banks spend their time and resources creating a bitcoin killer. Bitcoin will still not be affected in any way and people will use it as before.

[fiulpro]

-NO-
The reason they cannot do that is :
1. They are not cryptocurrencies
2. They are highly dominated by the governmental bodies and backed up making them more close to fiat
3. There would not be any liberty there, you would definitely be tracked
4. Less profits as compared to cryptocurrencies

But then again there would be some laws and regulations that will try to ban cryptos in the particular country and to also get people to accept CBDC's which can be sad for sure but people would definitely find ways to curb this and make the best use of it.

[Smartprofit]

Can they shut down my full node? Can they shut down the mining farms? Then, they can't kill bitcoin.

In my opinion, CBDC is a very big threat to cryptocurrencies (including Bitcoin and Ethereum). 

Although off-topic, but Ethereum, as centralized as it is, can cooperate with banks to ensure more profit. JP Morgan already owns a crucial part of Ethereum, and with the "development" of their PoS-ed ETH 2.0, it can benefit the financial sector, by a lot.

I can think of Ethereum as a future consensus mechanism, for banks. So, I rather believe CBDCs can be build on top of Ethereum.

In my opinion, the key point is the ability to freely exchange fiat for bitcoin and bitcoin for fiat.  

CBDC is a digital financial system that is fully controlled by the Central Bank (unlike, for example, cash).  The exchange of bitcoins for CBDC can be disabled at the program level.  

This will turn Bitcoin into a geek toy.

In the conditions of digital marking of goods and services, the illegal exchange of Bitcoin for goods (works, services) can also be limited.  

Yes, this requires concerted action by the governments of many countries .... Nevertheless, it is possible.

[Coyster]

We have been talking about this for a very long time now, actually i think one of the reason behind some countries launching CBDC's is their misconception of trying to compete with Bitcoin, or trying to convince their citizens to use the state issued digital currencies rather than Bitcoin, another reason would of course be competition amongst nations in terms of following the latest trend, but that is by the way.

Having said that, these countries are actually getting it wrong issuing/creating/launching CBDC's with Bitcoin at the back of their minds, they forget that theirs is centralized and issued by them, theirs will function like their fiat currencies and would be manipulated by the government. Bitcoin is none of that, it is decentralized, deflationary and not issued by any central authority. The thing is this, while quite a lot of us are knowledgeable about all of these, there are masses out there that are not, and the government are good in spreading their propaganda about Bitcoin and promoting their CBDC on the other hand, this can definitely deceive people who do not have so much knowledge.

[BlackHatCoiner]

CBDC is a digital financial system that is fully controlled by the Central Bank (unlike, for example, cash).

Central bank does fully control cash, since it fully controls the supply. Sure, it doesn't know who pays who, but monopolizing people's money is entire control.

The exchange of bitcoins for CBDC can be disabled at the program level. 

You can't know what I exchange, unless there's an intermediary involved. Same goes for cash, bank accounts, poker stars credit points, anything that's treated as money. However, electronic money, such as bank account, does violate your privacy.

This will turn Bitcoin into a geek toy.

No, it wouldn't. Even if we assume they somehow traced everyone who's going to trade their E-USD for BTC, and froze their accounts, which is impossible but say if, there's still a pretty strong economy build on top of bitcoin. There are people, me included, who use bitcoin as a currency. Also, this dictating attitude would push many into using money that is censorship resistant.

[TimeTeller]

We have been talking about this for a very long time now, actually i think one of the reason behind some countries launching CBDC's is their misconception of trying to compete with Bitcoin, or trying to convince their citizens to use the state issued digital currencies rather than Bitcoin, another reason would of course be competition amongst nations in terms of following the latest trend, but that is by the way.

Having said that, these countries are actually getting it wrong issuing/creating/launching CBDC's with Bitcoin at the back of their minds, they forget that theirs is centralized and issued by them, theirs will function like their fiat currencies and would be manipulated by the government. Bitcoin is none of that, it is decentralized, deflationary and not issued by any central authority. The thing is this, while quite a lot of us are knowledgeable about all of these, there are masses out there that are not, and the government are good in spreading their propaganda about Bitcoin and promoting their CBDC on the other hand, this can definitely deceive people who do not have so much knowledge.

I think, one major reason that they are now creating their own CBDCs is because of digitalization driven by this pandemic.
I don't think they are competing with BTC here because btc is not a competitor of CBDC.
As people are going digital, CBDC is a good form for their people to use as payment method and other financial transactions, avoiding the physical cash.
As crypto is getting popular, going into CBDC won't be hard for them to implement this digitalization. We all know that CBDC is a centralized one.
Sooner or later, their people will understand the difference of CBDC and BTC or other alts. But using their CBDC is a good start to learn crypto, that is for those noncrypto users.

[KennyR]

India doesn't have any strong stand on its legality of bitcoin usage, but it heavily tax the Cryptocurrency. The government wants the profit out of the Investment, but doesn't give any official statement whether the usage is legal or not. People consider it to be legal based on the taxation.

Next thing, people continue to use cryptocurrency amidst several warnings and other problems put forth by the government. Government is well aware of it and it thinks CBDC can limit the usage of cryptocurrencies which is a wrong understanding. Only benefit a government can get out of CBDC is the stagnation, because it is the country that has got more than trillions kept on Swiss Banks.

[ingiltere]

It's impossible as you and all other users here already know. They can try everything with their power to stop Bitcoin but in the end they will fail, they always do. If we want to use a centralized money system we can go on with current one as almost everything is digital. The only difference is governments can print money however they want and it brings inflation. Who would like to see their savings value go down everyday?
I don't know about altcoins and probably most of them will be obsolete by the time spontaneously but Bitcoin prove itself already and is here to stay.

[Uang_kartal]

concerns of an agency such as a bank and a few that regulate finances. It may be a threat to them in certain countries. They are worried that citizens will tend to choose cryptocurrencies while the printed money supply will not be used optimally by the community anymore with too much supply. technology can't be stopped. I've heard in several countries that promote to replace the tourism sector. Even other countries that have adopted and are now legal currencies (crypto).
Crypto is an alternative form and there is no obligation for a country to use it.
I think the existence of crypto is an convenience.

[kawetsriyanto]

~ do you see any possibility of Central Bank's Cryptocurrencies killing Bitcoin, Crypto Currencies?

Do you think CBDC controls Bitcoin or crypto world?
Bitcoin or crypto world is decentralized, no individual or no institution controls it. So, how to stop Bitcoin or crypto world? It's impossible, dude.
Even if all banks try to ban Bitcoin and all crypto activities, they can't kill cryptocurrencies. So, we shouldn't be too worried about this CBDC, it can't do anything to Bitcoin and crypto.

[qwertyup23]

I do not think so- financial freedom is one of the reasons for the birth of cryptocurrencies. If banks were to create their own centralized currency in hopes of eliminating the need for the people to use cryptos, this just goes against the very foundation and nature on why people opt to use cryptocurrencies in the first place.

Decentralization and freedom are the reasons on why we transact. We use BTCs as the currency for anonymity and privacy- not to mention, every public block is listed on a public ledger (available to anyone) so that it can remain proofless.

I doubt that people would choose centralized currencies over decentralized ones. I really see no reason on why this would also kill cryptos in the process. In fact, I see this as an opportunity for the price of the latter to increase during the process.

[adzino]

Are they going to make the central bank digital currencies decentralized? Then yes. But will they? I don't think so. They are never going to so something like this. Decentralization means more power to the citizens which is never going to happen. So no, central bank issued digital currencies are not going to kill crypto currencies. They are like regular fiat currency but with slightly different structure where they use a digital ledger.