Is Digital dollar a threat to Bitcoin ?

[wxa7115]

The Chinese CBDC wasn't very successful at all. We know China has an authoritarian government that will force its people to use government platforms but it seems not very effective for the Chinese since they are still using the Wechat and etc. There were reports that the Chinese are not using CBDC anymore.

In Nigeria as well, it's also not working, and its due to the adoption of BTC in the country. There could be any different result in any other place or country.

CBDC failure has nothing to do with bitcoin, and even successful CBDC has no effect on bitcoin, they are basically 2 different assets, and CBDC is simply an upgraded version of Fiat. CBDC is inevitable because we are in the digital age and the government's goal in issuing it is to try to control the people more than to compete with bitcoin. If the digital dollar were to be created, I would consider it a rival to today's stablecoins rather than bitcoin or altcoins.

CBDCs have always been inevitable, if a scammer can create their own useless coin then it is clear governments can do the same, but as you state I do not see them as opponents for bitcoin, since anyone which is holding bitcoin for reasons beyond just making money will know it is a terrible idea to exchange their bitcoin for those CBDCs.

And while CBDCs will compete against stable coins there is no guarantee they will beat them in a fair competition, as if you need to identify yourself just to open a wallet then many people will prefer to keep using stable coins for the time being.

[1714763730]

1714763730

[1714763730]

1714763730

[1714763730]

1714763730

[1714763730]

1714763730

[1714763730]

1714763730

[kro55]

In my opinion, both are entirely different, so they cannot threaten each other, using CBDC is no different than you are using fiat. In a sense, CBDC is a digital version of fiat and if we cannot compare fiat to bitcoin then CBDC is similar.

I agree with pooya87's point: digital dollars have been around for a long time, and we have been using them for a long time, so it would not be correct to say that it is a threat or will compete with bitcoin. Bitcoin is not just a currency, it is an asset and an investment, so to speak, there is no such thing as a government-created asset class to compete with bitcoin.

[mv1986]

In my opinion, both are entirely different, so they cannot threaten each other, using CBDC is no different than you are using fiat. In a sense, CBDC is a digital version of fiat and if we cannot compare fiat to bitcoin then CBDC is similar.

I agree with pooya87's point: digital dollars have been around for a long time, and we have been using them for a long time, so it would not be correct to say that it is a threat or will compete with bitcoin. Bitcoin is not just a currency, it is an asset and an investment, so to speak, there is no such thing as a government-created asset class to compete with bitcoin.

Bitcoin's mission and purpose won't change in the slightest because of the introduction of a CBDC. The situation remains the same: the CBDC is pretty much the same as a simple dollar bill from the perspective of how it is created (out of thin air) and how it is backed (by nothing). Now some will argue that the dollar bill is backed by the strength of a national economy, but that would imply that the money printing is based on a rational relationship between the quantity of money being produced and put into circulation and the strength of the economy., but all too often have we seen a decoupling of money quantity and the economy's strength. It just doesn't make sense anymore (and probably might have never made sense, but wasn't as consequential as it is now getting more and more).

[franky1]

Bitcoin's mission and purpose won't change in the slightest because of the introduction of a CBDC. The situation remains the same: the CBDC is pretty much the same as a simple dollar bill from the perspective of how it is created (out of thin air) and how it is backed (by nothing). Now some will argue that the dollar bill is backed by the strength of a national economy, but that would imply that the money printing is based on a rational relationship between the quantity of money being produced and put into circulation and the strength of the economy., but all too often have we seen a decoupling of money quantity and the economy's strength. It just doesn't make sense anymore (and probably might have never made sense, but wasn't as consequential as it is now getting more and more).

fiat/CBDC wont be backed by an underlying asset nor of "strength of national currency"
its purely backed by income/tax/court laws of maintaining that population gets paid in fiat, pays taxes in fiat and fines/debts in fiat(legal tender laws). which keeps fiat in circulation and popular by citizens

[yudi09]

It is still in testing phase. Do you think this digital dollar can be threat to bitcoin ? My answer is never because it is centralized.

Logically, this will not affect Bitcoin because besides being centralized, Bitcoin is also limited in number. I often encounter news like this and for us it is not a threat. If you see and have followed the development of the crypto space, Bitcoin is a threat to those who think Bitcoin is a rival.

I think smart people who are able to see the potential of economic systems will always be happy to choose Bitcoin for the long term. Not without reason.

[BALIK]

~~

And while CBDCs will compete against stable coins there is no guarantee they will beat them in a fair competition, as if you need to identify yourself just to open a wallet then many people will prefer to keep using stable coins for the time being.

I don't think so, if CBDCs were created and used on exchanges, I would use CBDCs instead of current stablecoins. Stablecoins created by private companies, it is riskier than government CBDC. I will skip centralizing them, I will just talk about their safety, then it is clear that CBDC will win this race. Like the accusations we see in USDT, if unfortunately, Tether crashes, our assets in USDT will also disappear, but if it is CBDC it will be safer.

[Jawhead999]

What threat?

I don't think many people are using Bitcoin as a currency, most of them are use Bitcoin as an investment, so what's the threat if the holders only hold the coins and didn't have any intention to send or convert their coins to fiat in hurry?

I will say we might use CBDC in the future since the marketplaces will get forced to accept it, but it doesn't mean I will sold all of my coins.

[pooya87]

I don't think so, if CBDCs were created and used on exchanges, I would use CBDCs instead of current stablecoins. Stablecoins created by private companies, it is riskier than government CBDC. I will skip centralizing them, I will just talk about their safety, then it is clear that CBDC will win this race. Like the accusations we see in USDT, if unfortunately, Tether crashes, our assets in USDT will also disappear, but if it is CBDC it will be safer.

Exactly. What I always say is that things that are not in the same category can not be a threat for each other. That is bitcoin and centralized coins (eg. CBDCs). But another way of saying it is things that are in the same category are a risk for each other. "Digital Dollar" or any other form of centralized payment system is a threat to existing centralized cryptocurrencies like stable coins. The day CBDCs are introduced the centralized stablecoins like Tether will start dying because people would start mass migrating to them since as you said they are a lot safer considering governments issue them not some shady company that can be shut down by the government!
Such transition won't affect the market though. It will be a smooth one that affects the company and anybody bag holding their shitcoin.

[CryptoHeadlineNews]

It is still in testing phase. Do you think this digital dollar can be threat to bitcoin ? My answer is never because it is centralized.

I guess you just answered the question yourself, so no need for me to elaborate more on this anymore. Because these are two different kinds of digital currencies altogether, because while the "dollar" is centralized (I.e controlled by both central banks and government), Bitcoin on the other hand is decentralized (I.e independent on its own)

[EarnOnVictor]

This kind of question has surfaced on the forum before, and the answer is simple, it's a threat to it, but the threat would be minimal. A threat in the sense that many that are using Bitcoin for particular reasons like payment and investments might want to divert to the US Central Bank Digital Currency (CBDC) because it's better for investment in my experience and would be more readily available for that purpose. But for payment, this would depend on the offers the digital currency comes with. If it's such an offer with zero to a low transaction fee, more people would adopt it in place of BTC.

The main strength of BTC is in privacy and anonymity, and it would use that to continue to secure its place amongst rival payment systems.

[posi]

This kind of question has surfaced on the forum before, and the answer is simple, it's a threat to it, but the threat would be minimal. A threat in the sense that many that are using Bitcoin for particular reasons like payment and investments might want to divert to the US Central Bank Digital Currency (CBDC) because it's better for investment in my experience and would be more readily available for that purpose. But for payment, this would depend on the offers the digital currency comes with. If it's such an offer with zero to a low transaction fee, more people would adopt it in place of BTC.

The main strength of BTC is in privacy and anonymity, and it would use that to continue to secure its place amongst rival payment systems.

If compared as a means of payment, bitcoin today is still not widely used because most people prefer to accumulate and hold bitcoins than to use it as a payment method. If compared as an investment, it is clear that CBDC does not have any effect on bitcoin, as CBDC is fiat, just a currency but in digital form.

So I believe CBDC can't threaten or affect the development of bitcoin, when CBDC comes out, instead of using fiat, we will use it for daily activities. BTC and CBDC are entirely different.

[EarnOnVictor]

If compared as a means of payment, bitcoin today is still not widely used because most people prefer to accumulate and hold bitcoins than to use it as a payment method.

I can't agree with your point, you mean a single coin having daily transactions of about 250,000 and yearly transactions of about 93 million on average is not widely used? These numbers are certainly more than the numbers of the holders as I am sure that BTC is active in payments, though more could be done.

If compared as an investment, it is clear that CBDC does not have any effect on bitcoin, as CBDC is fiat, just a currency but in digital form.

It would, first, don't forget that when trading BTC in futures and other online platforms, it's mostly in BTC/USD. Now, tell me, how won't it affect it if the development of CBDC causes more patronage of the USD? And be sure that being a fiat does not mean that the USD is not investable. Also, many are using BTC for payment now because of accessibility and low fee, what if CBDC comes with a better offer? Let it be out before we conclude.

[Kakmakr]

The general pubic does not know the difference between centralized and decentralized... and they simply do not care about that. They care about some government giving the "green" flag on a currency that they can use everywhere. 

We have a huge task to educate people on the difference between the two technologies and what the threat will be to use a centralized technology. 

[_BlackStar]

The digital dollar or any digital fiat currency doesn't feel like a threat to bitcoin, but it certainly can be considered a real threat to other centralized altcoin including stablecoin. I agree with the idea because it is quite possible that CBDCs are adopted by most of the centralized exchanges instead of ignoring them. It will also affect the interest of many people in its use cases as CBDC is the government's official currency as legal tender. So of course it will help centralized exchange to grow bigger due to increased interest.

We have a huge task to educate people on the difference between the two technologies and what the threat will be to use a centralized technology. 

It doesn't have to be, let them choose what they think is safe as when they trust their bank and savings instead of investing in bitcoin. I don't think it's our responsibility to educate, unless they start asking which is better.

[Iranus]

If compared as a means of payment, bitcoin today is still not widely used because most people prefer to accumulate and hold bitcoins than to use it as a payment method.

I can't agree with your point, you mean a single coin having daily transactions of about 250,000 and yearly transactions of about 93 million is not widely used? These numbers are certainly more than the numbers of the holders as I am sure that BTC is active in payments, though more could be done.

Where do you get this metric? I mean, is this bitcoin transaction volume? If it's bitcoin's trading volume, the daily number is much bigger, I just checked CMC, and it shows bitcoin's 24 hour trading volume is over 13 billion. A number that is not too large compared to the trading volume of forex. But this is the volume bought and sold on exchanges, not the volume used as a daily payment method. People are still using bitcoin for investment instead of using it as a payment method. Even if your metric is a transaction metric for payments, 93 million is still too small to be considered widespread.

[Twentyonepaylots]

In my opinion, both are entirely different, so they cannot threaten each other, using CBDC is no different than you are using fiat. In a sense, CBDC is a digital version of fiat and if we cannot compare fiat to bitcoin then CBDC is similar.

Not entirely technically coz fiat like any other currency powers the bitcoin. How would you think any cryotpcurrencies would raise their value without any external force to power it up? What I think should be more appropriate to call any currency is competitor rather than being a threat coz basically there won't be any digital currency without any fiat back up. I agree, on this case bitcoin is merely an investment to people, not even a currency thought of a thing.

I agree with pooya87's point: digital dollars have been around for a long time, and we have been using them for a long time, so it would not be correct to say that it is a threat or will compete with bitcoin. Bitcoin is not just a currency, it is an asset and an investment, so to speak, there is no such thing as a government-created asset class to compete with bitcoin.

Uhmm I don't think so. As you said Bitcoin is an asset and investment, there are lot to compete with being these two.

[nullama]

The general pubic does not know the difference between centralized and decentralized... and they simply do not care about that. They care about some government giving the "green" flag on a currency that they can use everywhere. 

We have a huge task to educate people on the difference between the two technologies and what the threat will be to use a centralized technology. 

This is actually quite true.

Most people actually might end up preferring something centralized as it's usually simpler and easier to use. For example Google, Facebook, etc, instead of simply the Web 1.0, which was decentralized but "for geeks only".

Similar with Bitcoin, it started "for geeks only" but now it's made easy with lots of centralized companies.

[Nrcewker]

Recently came across this news
https://www.forbes.com/sites/jasonbrett/2022/02/07/fed-designs-digital-dollar-that-handles-17-million-transactions-per-second/

It is still in testing phase. Do you think this digital dollar can be threat to bitcoin ? My answer is never because it is centralized.

Dollar has fixed rate, we use that to evaluate the value of BTC. Moreover if you see it is similar to that of USDT only. So is USDT currently a threat to Bitcoins? No right. Then similarly this might also happen side by side simultaneously. Bitcoins are already popular coins, and definitely many people use it as an asset rather than a coin. But this digital dollar will be treated as a currency only which value will be fixed with Dollar price. So yes both will have different audience and holders.

[Japinat]

It's a tricky one, but I absolutely believe that the digital dollar poses a threat to bitcoin. There is a possibility that the federal government will enact absurd taxes and restrictions. There are a number of ways in which this could negatively impact bitcoin owners, and even lead to a desire to sell their assets. As a result, the Fed will provide bitcoin owners with a tempting offer to convert their funds to the digital dollar at an initial one-to-one exchange rate that will eventually depreciate.

Yes, it is a tricky one to say. But I'm viewing the opposite thing where it is the digital dollar (government) who views bitcoin as their enemy and poses a threat and not the other way around. Governments around the world won't be creating such thing like digital currencies if bitcoin is not stressing them out, just like China, they have banned the use of it because they don't know yet how it really works because they cannot control it as well. But they can't blind the people nowadays because eventually, these digital currencies will depreciate because they aren't designed to avoid inflation.

[S A KHAIR]

Recently came across this news
https://www.forbes.com/sites/jasonbrett/2022/02/07/fed-designs-digital-dollar-that-handles-17-million-transactions-per-second/

It is still in testing phase. Do you think this digital dollar can be threat to bitcoin ? My answer is never because it is centralized.

The digital dollar is a digital version of the paper dollar so it can be said that it will not pose any threat or effect to bitcoin. The government created CBDC just to bring convenience as well as suitable for today's modern life. Bitcoin is the only digital gold, so it can be said that no government-created digital currency can compete with it.