In a recent interview with Kitco News, Oliver Finch, the CEO of Bittrex Global, expressed skepticism about the validity of central bank digital currencies (CBDCs).
More about CBDCs
Finch believes that CBDCs are a solution that is seeking a problem to solve. He also points out that CBDCs are fundamentally different from Bitcoin (BTC) and other cryptocurrencies due to their centralized nature.
The core of cryptocurrency and digital assets is a distributed ledger, also known as blockchain technology. Some central governments and banks are considering creating a CBDC without this technology, which may not be appealing to those who are interested in digital assets. Before it can be determined if CBDCs will replace altcoins, Bitcoin, or stablecoins, we need to understand the purpose of this product.
Currently, it seems like governments are jumping on the digital bandwagon without a clear reason for doing so. Simply adding the word “digital” to a product is not enough – there must be a purpose behind it. As it stands, CBDCs appear to be a solution in search of a problem.
According to Finch, CBDCs have raised concerns and suspicions about their intended purpose, despite their ability to make cross-border transactions faster and more affordable.
These concerns are legitimate, and while it’s not necessary to become a conspiracy theorist about the motivations behind CBDCs, the lack of depth in their reasons does give rise to some apprehension about what’s really happening.
Cross-border payments with fiat
He mentioned that conducting cross-border payments with fiat currency is a major inconvenience.
The process is costly, slow, and unresponsive. While it may be possible to resolve this issue by directly approaching the bank, it could be more complicated than developing a CBDC.
Therefore, a CBDC could be useful for cross-border transactions. However, beyond that, there may not be many compelling reasons to pursue this option.
Stay tuned for more news about the issue.
