What Unites CBDC and Cryptography
2022.12.23 03:41
What Unites CBDC and Cryptography
Budrigannews.com – According to one industry professional, digital currencies like Bitcoin (BTC) and central bank digital currencies (CBDCs) might engage in some interactions that would be beneficial to both parties.
CBDC is frequently viewed as the exact opposite of crypto, which is frequently associated with financial freedom. However, chief operating officer and deputy CEO of the crypto trading platform INX, Itai Avneri, believes that there can still be a balance between the two.
In an interview with Cointelegraph on December 22, Avneri stated that CBDCs and regulated cryptocurrencies could possibly complement one another in the future due to the distinct advantages of the two forms of digital currencies.
Avneri suggested, comparing CBDCs to regulated primary offerings, that allowing crypto funds to participate in such offerings would be advantageous for both parties. That would give crypto investors “comfort and confidence to trade in a regulated environment,” as well as specifically expose such financial instruments to a larger audience.
In a statement, the deputy CEO of INX stated, “In my vision, the CBDC ecosystem will not be different, but we have a long journey ahead of us until we get there,” adding that striking a balance between crypto and CBDCs would be a “master art.”
The executive stated that he is unaware of any current initiative that would permit one to purchase Bitcoin with a CBDC or any other potential interactions between CBDCs and cryptocurrencies.
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Additionally, Avneri emphasized the significance of combining regulation and decentralization due to the fact that full decentralization fails to take advantage of regulations like KYC controls, which “come with a price that sometimes is not good for investors.” He declared:
“When thinking about working with governments and central banks, I believe customers must be identified as it will serve their interest and will build the needed trust in the ecosystem.”
CBDC users still need to be able to communicate privately, “similar to how they may use physical cash today,” according to Avneri.
The news comes as INX and authentication company SICPA formed a partnership to assist governments in developing CBDC ecosystems. In 2021, the United States Securities and Exchange Commission approved INX as the first company to conduct a tokenized initial public offering, as previously reported.
INX agent Chief isn’t the only one to feel that CBDCs and digital money innovation could be gainful to one another later on. According to Thomas Moser, a member of the Swiss National Bank’s governing board, centralized financial projects like CBDCs may be able to provide more stability for the growth of decentralized finance.
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The digital asset hedge fund ARK36’s executive director, Mikkel Morch, is also of the opinion that CBDCs do not directly threaten cryptocurrencies like Bitcoin. Morch claims that CBDC still carries some risks when compared to stablecoins like Tether (USDT).
