The CEO of cryptocurrency exchange Binance does not see central bank digital currencies (CBDCs) as a threat to cryptocurrencies, such as bitcoin and ether. “It will validate the concept of blockchain so that anyone who’s still worried about technology will say, ‘Okay, our government is using technology now,'” he said.
CZ sees no threat to crypto from CBDCs
Binance CEO Changpeng Zhao (CZ) said on Wednesday that he believes central bank digital currencies (CBDCs) pose no threat to cryptocurrencies, such as bitcoin (BTC) and ether ( ETH), Reuters reported.
According to the Bank for International Settlements (BIS), nine out of 10 central banks are planning to launch their own digital currencies. The Atlantic Council’s CBDC tracker shows that 105 countries are currently exploring central bank digital currencies.
During a press conference at the Web Summit in Lisbon, Zhao was asked if CBDCs could pose a threat to Binance and cryptocurrencies, like bitcoin and ethereum. He has answered:
Is this a threat to Binance or other cryptocurrencies? I do not think so. I really think the more we have, the better.
He stressed that blockchain technology should be available to CBDCs and adopted by governments.
Binance CEO said:
This will validate the concept of blockchain so that anyone who still has concerns about the technology will say, “Okay, our government is using the technology now.”
“So all of those things are good,” he continued, adding that CBDCs would still be different from native crypto.
The Correlation of Crypto with the Stock Market
The Binance chief also mentioned that the cryptocurrency has a strong correlation to the stock market. However, bitcoin’s volatility has recently fallen below that of the Nasdaq and S&P 500, according to crypto data provider Kaiko.
Zhao, whose company invested $500 million in Twitter when the social media platform was acquired by Tesla CEO Elon Musk, explained:
In theory, they should be inversely correlated, but today they point in the same direction, mainly because most people who trade crypto also trade stocks.
“When the Fed raises interest rates and the stock market crashes, they want more money, so they sell crypto. This is because the user base is still very highly correlated,” the exec concluded.
Do you think central bank digital currencies pose a threat to cryptocurrencies? Let us know in the comments section below.
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