The role of cryptocurrency in the pending CBDC rivalry

on Aug 22, 2020
  • CBDC development is progressing, and many fear that they will lead to further clashes between nations.
  • Meanwhile, as bank-owned cryptos, all user data will be theirs for the taking, as cash goes out of use.
  • This is where 'real' cryptos continue with their role of providing freedom and some semblance of anonymity.

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The last several years have brought major changes to the crypto industry, but also to the traditional financial industry. Due to the crypto bull run of 2017, the world learned of the crypto industry, its potential, risks, and crypto became a hot topic. However, unlike many other trends that tend to emerge just as suddenly, crypto never went away. Instead, it became bigger.

World’s most powerful nations are going crypto

The price surge in 2017 was followed by a crypto winter of 2018, when most coins saw massive price crashes. However, the industry definitely made an impression, causing major companies to develop an interest in digital coins.

The most notable of them was Facebook, which eventually announced the development of its own coin. This caused a major shift in the world, as entire countries, supposedly in fear of Facebook’s reach and potential ownership of future money, decided to make their own move and enter the crypto world.

China was, of course, the first one to announce national crypto, the so-called Central Bank Digital Currency (CBDC), popularly named ‘digital yuan.’

But, while it was the first, it was far from being the last to do so. In fear of China and Facebook alike, numerous other nations did the same. And, according to recent reports, even the US is making its own CBDC right now.

The role of ‘real’ cryptocurrencies

New reports claim that the US doesn’t plan to launch its coin and actually use it. However, many believe that this is only temporary, and that the digital dollar will see the light of day sooner, rather than later.

If it happens, this will lead to a major clash between the digital dollar and digital yuan, as these two major forces continue to clash. Tensions between the two are already high, and there is no reason why this wouldn’t continue in the CBDC space.

Meanwhile, they will both offer their services to the people, but as bank-owned coins, they will completely abolish privacy.

This is where ‘traditional’ cryptos come in. While still lacking in some aspects, such as stability, scalability, and speed, they will still offer some amount of privacy, and the user data can still remain immutable and safe.

They can help the people against state powers that may repress them as part of the conflict between one another. Just like with fiat, cryptocurrencies will offer a third option, which will be a better one, with freedoms that major nations are highly unlikely to include into the deal.


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