{"id":137427,"date":"2023-09-02T05:48:18","date_gmt":"2023-09-02T00:18:18","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=137427"},"modified":"2023-09-02T05:48:18","modified_gmt":"2023-09-02T00:18:18","slug":"11-potential-impacts-on-crypto-and-the-market-from-the-rise-of-cbdcs-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/11-potential-impacts-on-crypto-and-the-market-from-the-rise-of-cbdcs-crypto-news\/","title":{"rendered":"11 potential impacts on crypto and the market from the rise of CBDCs – Crypto News"},"content":{"rendered":"
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In June 2023, the Atlantic Council, based in the United States, announced the results<\/a> of a study on global nations\u2019 interest in and progress toward creating their own central bank digital currencies. Eleven countries have already launched CBDCs; 130 others are in the exploratory phase, and about half of those have begun the development process.\u00a0<\/p>\n

Market watchers cite multiple factors behind governments\u2019 push toward CBDCs, from the decreasing use of cash by the general population to geopolitical tensions and events. Whatever the underlying reasons, though, crypto industry players need to keep an eye on developments and consider how the rise of CBDCs could impact the industry and global marketplace. Here, 11 members of Cointelegraph Innovation Circle<\/a> share their predictions for possible outcomes from the ever-expanding development and introduction of CBDCs.<\/p>\n

A boost in the uptake of cryptocurrencies<\/h2>\n

CBDCs manifest the \u201cif we can\u2019t beat them, join them\u201d attitude of governments in response to blockchain technology. In the short to medium term, CBDCs could help legitimize crypto but struggle to compete in utility and benefits, likely leading to a boost in the uptake of cryptocurrencies. In the long term, governments may attempt to stealthily \u201cphase out\u201d crypto as CBDCs mature and gain relevancy. \u2013 Sheraz Ahmed<\/a>, STORM Partners<\/a><\/p>\n

Deepened importance of decentralization<\/h2>\n

CBDCs are still largely unknown territory. The risks to personal freedoms are real. A potential crypto industry impact is the deepened importance of decentralization, privacy and other forms of the human rights of freedom and self-determination. \u2013 Tiago Ser\u00f4dio<\/a>, Partisia Blockchain<\/a><\/p>\n

Tighter regulations<\/h2>\n

The rise of CBDCs may validate blockchain technology and cryptocurrencies, boosting public familiarity with and acceptance of digital assets. However, this could also bring tighter regulations, impacting existing crypto market dynamics. It\u2019s a delicate balance between validation and regulation. \u2013 Tomer Warschauer Nuni<\/a>, Kryptomon<\/a><\/p>\n

Recognition of stablecoins as CBDCs<\/h2>\n

CBDCs are an almost inevitable game theory of governments trying to copy or provide an alternative to decentralized money, but with government trust anchoring the confidence. With USDC and USDT being backed by bonds now through BlackRock, I would say that the USD-based stablecoins that are prevalent are already a form of CBDC, since governments can monetize and mint digital USD through debt. \u2013 Jagdeep Sidhu<\/a>, Syscoin Foundation<\/a><\/p>\n

Join the community where you can transform the future. Cointelegraph Innovation Circle brings blockchain technology leaders together to connect, collaborate and publish.\u00a0Apply today<\/a><\/strong><\/p>\n

Cryptocurrencies being viewed as competition<\/h2>\n

The rise of CBDCs could have both positive and negative impacts on the crypto industry. One con could be that governments might perceive CBDCs as competition to private cryptocurrencies. However, on the other hand, CBDC adoption plays well for the larger narrative of the adoption of blockchain technology and cryptocurrencies. \u2013 Abhishek Singh<\/a>, Acknoledger<\/a><\/p>\n

A bridged gap between Web2 and Web3<\/h2>\n

CBDCs could help bridge the gap between Web2 and Web3. If they are allowed to coexist with crypto, CBDCs can actually reduce friction between the traditional finance and decentralized finance worlds. For example, these new payment systems could serve as an on- and\/or off-ramp for people trying to convert fiat into crypto. So instead of killing crypto, CBDCs could actually help Web3 become more accessible than ever. \u2013 Wolfgang R\u00fcckerl<\/a>, ENT Technologies AG<\/a><\/p>\n

New curiosity about other crypto offerings<\/h2>\n

While there\u2019s much anxiety about the development and rollout of CBDCs, industry leaders should embrace their inclusion as a new avenue for entering the DeFi space. The normalization of crypto by governments could inspire otherwise reluctant participants to develop curiosity about other offerings available throughout the space. Then, the true test for CBDCs can become how they survive the free market. \u2013 Oleksandr Lutskevych<\/a>, CEX.IO<\/a><\/p>\n

A more diverse product landscape<\/h2>\n

CBDCs are a double-edged sword, because while they drive the adoption of digital currencies, they do so at the expense of sacrificing a core value proposition of cryptocurrency: decentralization. It is unrealistic to assume CBDCs will not emerge, since many on-chain products are needed to ultimately build out a diverse landscape of products that can serve all levels of consumers. \u2013 Megan Nyvold<\/a>, BingX<\/a><\/p>\n

More access to financial services for the unbanked<\/h2>\n

Increased financial inclusion and credit access for the unbanked population is one valuable utility of CBDCs, since non-bank payment system providers can distribute CBDCs, eliminating the need for a traditional bank account. The rise of CBDCs would allow individuals without bank accounts to build credit and access lower-interest-rate loans if CBDC data is shareable with banks. \u2013 Vinita Rathi<\/a>, Systango<\/a><\/p>\n

Heightened focus on existing cryptocurrencies<\/h2>\n

CBDCs will lead to a heightened regulatory focus on the crypto industry. As central banks begin to explore CBDCs, they will also be conducting research and risk assessments on the existing crypto ecosystem, which could lead to policy changes. Experts debate CBDCs\u2019 impact on anonymity and decentralization while acknowledging their role in mainstream adoption and familiarity with digital currencies. \u2013 Anthony Georgiades<\/a>, Pastel Network<\/a><\/p>\n

Nothing of significance<\/h2>\n

I see no material effect; it\u2019s net-neutral, in my opinion. Although CBDCs further legitimize blockchain technology, to a degree, that is offset by the fact that the CBDCs will run on private blockchains (such as Hyperledger), where there is no need for a token. On the fringe, maybe it pushes a few skeptics over the edge in terms of validating the space. \u2013 Timothy Enneking<\/a>, Digital Capital Management<\/a><\/p>\n

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This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.<\/em><\/p>\n

Learn more about Cointelegraph Innovation Circle and see if you qualify to join.<\/u><\/strong><\/em><\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

In June 2023, the Atlantic Council, based in the United States, announced the results of a study on global nations\u2019 interest in and progress toward creating their own central bank digital currencies. Eleven countries have already launched CBDCs; 130 others are in the exploratory phase, and about half of those have begun the development process.\u00a0 […]<\/p>\n","protected":false},"author":2,"featured_media":137428,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[235,203,210,234,231,232,237,238,236,233],"class_list":["post-137427","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","tag-bitcoin","tag-crypto-currency","tag-elon-musk","tag-ethereum","tag-hyperledger","tag-ibm","tag-mining","tag-nodes","tag-spacex","tag-tesla"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/137427","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=137427"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/137427\/revisions"}],"predecessor-version":[{"id":148428,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/137427\/revisions\/148428"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/137428"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=137427"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=137427"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=137427"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}