Can Central Bank Digital Currencies Kill Cryptocurrencies ?

[Fortify]

Reserve Bank of India (RBI) Deputy Governor T. Rabi Sankar says central bank digital currencies could “kill whatever little case there could be” for cryptocurrencies, like bitcoin and ether.

RBI Deputy Governor T. Rabi Sankar talked about the potential impact of central bank digital currencies (CBDCs) on cryptocurrencies, like bitcoin and ether, at a webinar organized by the International Monetary Fund (IMF), local media reported Friday. By “private cryptocurrencies,” the Indian government and the central bank refer to all non-government-issued cryptocurrencies, including bitcoin and ether.


I know IMF are huge critics of Bitcoin and any country that adopts Bitcoin as a legal tender, they're also involved one way or the other innit . As I don't blame RBI much, only scared of dollarization https://news.bitcoin.com/indias-central-bank-rbi-warns-crypto-could-lead-to-dollarization-of-economy/ which they say are not of them countries interest. Asides that, drug abuse and money laundering has been a norm over there.

IMF are chiefly responsible and Championing the move against Crypto Currencies and Bitcoin all for them selfish interest... But do you see any possibility of Central Bank's Cryptocurrencies killing Bitcoin, Crypto Currencies ?, although China imposed huges bans of any other digital currencies except there's and are doing quite well ( Economy ) correct me if I'm not!

What you think?!

Central banks have a lot of influence over laws surrounding finances which include cryptocurrencies, so what they say matters. If they choose to get stricter and implement bans then it will be devastating, especially if a big bloc like the EU was involved. Eventually they will want to make their own after seeing it is useful and popular - if it can replace physical cash with increased transparency that could be good for the taxman too.

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[Gyfts]

Simply put — if you think CBDCs will kill Bitcoin/crypto, then you simply don't understand Bitcoin/crypto. Both might have some similarities on how they technically work in the back-end, but both are fundamentally very different.

I don't think CBDC's can compete with crypto. My concern is government backed efforts to go paperless and install CBDC's in place of fiat currencies while trying to oust crypto at the same time. It's not that CBDC's on their own can be successful when applying free market principles. There's no chance a consumer would voluntarily choose a CBDC without their being other factors involved (like government coercion).

It's not much of a conspiracy when you realize the steps a lot of countries have been taking to curtail crypto growth. Their intentions have been clear from the start.

[serjent05]

I think CBDC can't kill cryptocurrency because the majority of people who are involved in cryptocurrency are avoiding the banking system.  Even if we think that banks have great influence, it won't affect people who don't want to use their service.  With that, CBDC cannot be considered a competitor of cryptocurrency so there is no way it can kill it.

[FanEagle]

In reality, they totally can and that is the scary part but people are ignoring it. I mean you are telling me that the whole world central banks could get together and pressure the president or whoever they need to in order to ban crypto and that would be not so great for us? It is obvious that we just need to accept the fact that central banks are actually profiting from this.

Well, we are taking our hands out of the fiat, and letting the rich got richer in the fiat world, and making sure that we spend our money on crypto, which they have no control over. That way, we are going to get rich or become poor, both of which will work for them very well.

[Vaskiy]

The deputy governor of Reserve Bank of India have mentioned, his organization believes that CBDCs have the potential to kill private cryptocurrencies. He connects the increasing adoption of simple UPI as a reason for the same. The fiat based peer to peer transaction have experienced an average transaction growth of 160% per annum over the last five years. During the 2020 lockdown this took fast phase growth. He cited blockchain technology that is being created even before that has failed to reach certain level of adoption.

[amishmanish]

CBDC are a different ball game. They are more like digital currency for spending your money saved in bank. But crypto is a evolving blockchain currency, which has  potential of  being used as a international payment token, an ever evolving currency which will appreciate over time on holding and most importantly crypto transactions help you to keep your identity safe

[Dunamisx]

For trying to adopt the changes made by cryptocurrency for sure it will not kill the industry what you concerned with and most provably people will take it as alternative since investors will not focus on one thing so for sure all of this will get adopted and maybe by the help of their created currency it will help boost the popularity of crypto. So chill out and don't worry about things which didn't give any bad effect yet.

I thought of it as well that why can't the government achieve a general ban on cryptocurrency despite dome launch on CBDC, yet the cryptocurrency adoption especially that of bitcoin continues to widens and increase, i wonder what OP was thinking when he assumed that CBDC to kick out cryptocurrency, but let look at it in this other way round, it can be possible but on alt coins because most of them happens to be shitcoins at the long run but bitcoin case is different, i see bitcoin as the only most recognized and acceptable digital currency for exchange of goods and services and this might be a reverse case in the place of other cryptocurrencies.

[TheNineClub]

I don't think Central Bank Digital Currencies offer the same ideas as cryptocurrencies, at least most of them. They will most likely form a separate sector of finances that will coexist with crypto and FIAT, but will (probably) have less importance than the other two. And they might as well intertwine with FIAT and crypto to form some kind of a bridge between those two. Could be interesting.

[Fatunad]

I don't think Central Bank Digital Currencies offer the same ideas as cryptocurrencies, at least most of them. They will most likely form a separate sector of finances that will coexist with crypto and FIAT, but will (probably) have less importance than the other two. And they might as well intertwine with FIAT and crypto to form some kind of a bridge between those two. Could be interesting.

For sure government had already been doing this into those early days or years of crypto existence yet everything that do opposes centralization shouldnt really be letting on loose.
We've seen on how they do struggle out on controlling crypto space but they do still failed thats why the only that they could get in touch with is into those times
on making those centralized platforms would follow up their regulation. CBDC's does exist and we know its usage and behavior or quality which it isnt really too far off with e-fiat.
Killing crypto is impossible thats why they would do coexist.

[19Nov16]

In my opinion not, decentralization will be the best choice for users, the presence of Central Bank will actually make users have their own choice so that they will not interfere with the market of decentralization, this is the same as a stable coin that never interferes with decentralization consistency but strengthens each other.

[South Park]

I don't think Central Bank Digital Currencies offer the same ideas as cryptocurrencies, at least most of them. They will most likely form a separate sector of finances that will coexist with crypto and FIAT, but will (probably) have less importance than the other two. And they might as well intertwine with FIAT and crypto to form some kind of a bridge between those two. Could be interesting.

It is true that CBDCs are different than cryptocurrencies, but governments want to deceive the public by claiming their coins are better since they are backed by them, and while many people will be deceived that is not the case for people like us, after all we are not holding fiat precisely because they are the ones that supposedly are backing it, and I say supposedly because we know fiat is not really backed by anything, which is why their collapse will happen at some point in the future.

[Smartprofit]

Simply put — if you think CBDCs will kill Bitcoin/crypto, then you simply don't understand Bitcoin/crypto. Both might have some similarities on how they technically work in the back-end, but both are fundamentally very different.

I don't think CBDC's can compete with crypto. My concern is government backed efforts to go paperless and install CBDC's in place of fiat currencies while trying to oust crypto at the same time. It's not that CBDC's on their own can be successful when applying free market principles. There's no chance a consumer would voluntarily choose a CBDC without their being other factors involved (like government coercion).

It's not much of a conspiracy when you realize the steps a lot of countries have been taking to curtail crypto growth. Their intentions have been clear from the start.

Money is a very important thing in a social society.  This is more important than a strong army and modern weapons. 

Therefore, state governments are very concerned about the prospect of developing private money.  They are creating a CBDC to destroy bitcoin and other cryptocurrencies. 

In addition, they want to gain more power over people (build a digital concentration camp). 

Only one thing can prevent them from realizing their plans - the states will not be able to unite for the sake of this goal (to overcome internal conflicts). 

Globalism has failed in the modern world.  And this is a definite chance for Bitcoin.

[doomloop]

For trying to adopt the changes made by cryptocurrency for sure it will not kill the industry what you concerned with and most provably people will take it as alternative since investors will not focus on one thing so for sure all of this will get adopted and maybe by the help of their created currency it will help boost the popularity of crypto. So chill out and don't worry about things which didn't give any bad effect yet.

It's true, crypto investors do not look at just one thing and focus on that, we look at multiple things all at once. I mean the NFT world, Metaverse world and DeFi world all started at the same time. People didn't say "oh I am going to just focus on this one", they invested in all of them and stopped investing much eventually in all of them.

Still do invest a bit, but not as hyped as it used to be. So, we need to realize the differences for sure. Doesn't mean that it has to be like that, just means that we could definitely go with this "not focusing on one thing" whenever central banks do something, people could love that, but share their love with other things as well.

[Pejoh Asu]

The idea to make a central bank digital is a good thing, I'm sure even though it is implemented effectively it will not affect Cryptocurrencies, this is because the Cryptocurrencies community that is widespread throughout the world cannot be easy to leave cryptocurrencies.

[DrBeer]

I do not think that cryptocurrency will take its full place in the financial system of the world. I'm talking about full-fledged, decentralized, "uncontrolled" cryptocurrencies. At least until the transformation of the cryptocurrency into a full-fledged means of payment and exchange takes place. And the cryptocurrency will cease to be a very tempting, but very "slippery", manipulative and purely speculative product. I think that the controlled change of trends in the market of "decentralized and uncontrolled by anyone" cryptocurrency will have time to pass more than once. Those who arrange these slides will again earn huge amounts of money. Those of the "simple" who are smarter will also have time to earn extra money. But, all other participants will pay from their pockets for this "show" of money flowing from one pocket to another. Given this, cryptocurrencies, in the existing world, could easily lose interest from manipulators and speculators if CBDCs can stop the flow of fiat-digital funds to crypto exchanges. And there is no interest among manipulators and large speculators - and the crypt will leave our lives, and will remain only in the memories of the participants of this forum

[Renampun]

So, Bitcoin is a currency that was created to not be controlled by the government, and the government plans it to kill it with a currency controlled by the government? They really don't understand what crypto is about. People with a basic understand of it (which sadly is not everyone in crypto community) know that blockchain alone doesn't make a coin fundamentally valuable. It's the decentralization, robustness, security against potential attacks. Bitcoin is miles ahead of both altcoins and CBDC here, and those things can't become better than Bitcoin due to their fundamental flaws.

in many countries, public trust in government has dropped dramatically...

it's true, that the price of bitcoin is not self-made, the price of bitcoin comes from people's beliefs. the existence of big transactions in bitcoin in the market is proof that bitcoin has stuck in the minds of millions of people around the world. CBDC, digital currencies, or whatever is designed by the government, is just a snare to lock the movement of people and it will make people's trust in the government decrease.

[Pomogator]

Indeed, the digital currencies of some large countries will look much safer than ether or bitcoin. This currency will be supported by something, we will understand that this country will try to support this currency. There will be at least some support for thoughts.

[Dunamisx]

I think CBDC can't kill cryptocurrency because the majority of people who are involved in cryptocurrency are avoiding the banking system.  Even if we think that banks have great influence, it won't affect people who don't want to use their service.  With that, CBDC cannot be considered a competitor of cryptocurrency so there is no way it can kill it.

First of it all we need to emphasize on the fact that they were both two different currencies that cannot be compared to each other, no any further similarities other than the two being used for an exchange and making of payment, those that are crypto enthusiast understand the need for it over Fiat currency, while this makes it more difficulty for others who don't really understand what and how cryptocurrency can make an impact to the growth and development of thier entire economic lives into a positive change with a better expectations.

[Ahli38]

I don't think this will have any effect on cryptocurrencies. however CBDC is just like a stablecoin. What makes the difference is that CBDCs are under government control(central bank). because the CBDC itself will be worth the money in the country. While cryptocurrencies or especially bitcoins are not under the control of the government, aka us or all of the holders as controllers. I prefer freedom. Holding a CBDC is just like holding ordinary money only in digital form that almost resembles cryptocurrency. So I think CBDC can coexist with cryptocurrencies. So I emphasize that CBDC will not be able to kill cryptocurrencies. because they seem to have a different world. although its function is almost the same as stablecoins, which is equivalent to a certain currency. However, the concept in it is different.

[laredo7mm]

It sounds like can fiat currency kill BTC! I ready doubts about this concept of CBDC and its potential. Most of the country in the world doesn't have the ability and resource to create and maintain their own CBDC. Allowing crypto assets and taxing them is less costly and convenient for the govt than creating CBDC. Also, I do not find many similarities between them expect their use case. So talking about killing one another is irrelevant.