CBDC is not necessarily a direct threat to decentralized cryptocurrencies; rather, it aims to eliminate the risks associated with stabelcoins. This was stated by the CEO of crypto fund ARK36, Mikkel Morch.
The top executive explained that the use cases and value proposition of decentralized digital assets “often go beyond simple transactions.”
The financier referred to a speech by Fed Chairman Jerome Powell, in which he allowed “the coexistence of well-regulated private stablcoins and the digital dollar.”
Morch expressed confidence that other countries, particularly Singapore, could follow a similar approach. In his opinion, the introduction of CBDC will “facilitate the spread of non-sovereign cryptocurrencies and blockchain technology.
The latter fact does not negate the fact of future competition between “stable coins” and national digital currencies, he added.”CBDC may reduce the role and demand for stabilecoins, provided there is a market for the latter. This applies more to the U.S. than to Singapore,” Morch explained.
The other day, Sopnendu Mohanty, chief financial technology officer at that country’s Monetary Authority, expressed great skepticism about the value of private cryptocurrencies. He predicted the emergence of a state-supported alternative within three years.
Recall, SWIFT will test the compatibility of CBDC in cross-border payments.