While there have been many advancements in the cryptocurrency space in regards to adoption and growth in the mainstream, one of the biggers hints towards a boom in the use of the technology has to be the intention of many central banks to look at Central Bank Digital Currencies (CBDC)
CBDCs are a curious cryptocurrency as they infer the use of blockchain technology and the creation of a digital token, but this token will be one based on a fiat currency that will be minted and created by the banks who create the paper and coin monies.
This is a major step for the technology, but in regards to the decentralized space, such as Bitcoin, it is not quite the same due to the heavy controls. However, what is more, the launch of such coins does not seem to be high priority in terms of speed.
Christopher Giancarlo, former CFTC Chairman and the co-director of the Digital Dollar Project has come out and said that it is not a ‘race’ to launch the first CBDC and that there are no winners and losers with regard to developing and deploying them.
Slow and steady
The cryptocurrency space is one that moves fast and has moved incredibly quickly in just a few short years in regards to mainstream growth. However, the want for a speedy creation of digital currencies for the central banks is unneeded, according to Giancarlo.
“I would push back against the characterization of this as a race. If it is considered a race, I think it would be a mistake for the United States because it has everything to lose by going too fast and getting this wrong. The winner of this is not who finishes first and the loser of this is actually not who finishes last. Thinking about this in a time dimension is the wrong way to analyze it,” he said.
A financial arms race?
While the perception in the US may be that there is no race to create a digital dollar or a US CBDC, and that the creation of this coin will come when it is ready, there is also the matter of the tech and financial arms race brewing.
There is little doubt that China has intentionally upped its work in the blockchain sector as it looks to use the new technology to push its standing forward. More so, there is enough evidence to suggest their own CBDC is far along and ready to launch with some haste.
This should be concerning to the US which has taken a mostly passive view on the blockchain and cryptocurrency space and could see itself left behind in an arms race for technology and financial growth.