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What would the rise of CBDCs mean for bitcoin and Facebook’s Libra?

What would the rise of CBDCs mean for bitcoin and Facebook’s Libra?
  • Central-bank digital currencies are becoming more and more popular all over the world. 
  • Many central banks are looking into this new asset class for the future but as these banks and financial institutions look into the future of this technology, bitcoin and Facebook’s libra could still find a place to be a part of the future when money becomes purely digital.

Central-bank digital currencies are becoming more and more popular all over the world. Many central banks are looking into this new asset class for the future but as these banks and financial institutions look into the future of this technology, bitcoin and Facebook’s libra could still find a place to be a part of the future when money becomes purely digital. This comes from the reserve bank of India former governor, Raghuram Rajan.

Almost every single major bank in the world is looking into this new asset class, the Bank of England and the bank of Thailand, even the Federal Reserve, are showing interest in these new cryptocurrencies. Even though the People’s Bank of China has already piloted its own central-bank digital currency, nothing major is going on as of yet.

With the pandemic of COVID-19 taking over the world this year, digital money is becoming more and more popular and the norm. For central-bank digital currencies, the assets are backed by reserves in the country's central bank rather than the persons deposits in his/her bank account all mobile wallet.

These new initiatives are being taken over by many central banks all over the world as they want to innovate the way they work and keep up with modern trends.

Essentially, if banks really do utilise all they can with CBDCs, where does this leave cryptocurrencies such as bitcoin and Libra? According to Rajan, both of these currencies would competing with the new asset class. This is because it is Fiat money and can be used to transact and store value.

It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!

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