Joseph Lubin, the co-founder of popular cryptocurrency Ethereum and the founder of ConsenSys, believes that China’s native cryptocurrency dubbed Central Bank Digital Currency (CBDC) will be compatible with permissionless blockchains like Ethereum.
Lubin made his claims in an interview with Forbes published on November 9. Lubin made it quite clear that he was willing to work with the Chinese government and help them learn more about the benefits of a public blockchain like Ethereum. He mentioned the case of the Belt and Road blockchain-based commerce platform saying:
“One reason is if the Belt and Road Initiative [a program trying to connect Asia with Africa and Europe via land and maritime networks] uses one of the weaker technologies and it sort of mandates that those networks be built in that technology, maybe it won’t be as interoperable.”
He believes that the above platform is built around one of the “weaker technologies” compared to public blockchains like Ethereum
“The main idea is that Ethereum is the strongest of the blockchain technologies and it’s a very positive virus to implant in people’s minds,” he said.
Talking about the Chinese government and how they are going to handle cryptocurrencies at a national level and if it would be compatible with other blockchains and cryptocurrencies, Lubin stated that it’s all in the hands of the authorities. He said:
“I assume it is going to be exactly what Chinese leadership thinks is most beneficial to Chinese leadership […] The country could do the calculation and decide there needs to be a firewall around it, or it could do the calculation and decide, “Hey, this is an incredible vector for destroying the American reserve currency status,” which is probably my guess.”
Lubin, however, mentioned that china will always attempt to subvert the status of the U.S dollar as the world reserve currency. However, he thinks that China’s digital currency won’t be a threat to the U.S dollar. He mentioned how China and Russia are conducting business without using the dollar. He believes CBCD will have a minor impact. He further explained:
“There are lots of reasons why American influence is shrinking and will probably continue to shrink. That may not be a bad thing but in some ways, it’ll be a bad thing. China’s particular cryptocurrency I don’t think is a major factor.”
He concluded by admitting that in the end the Chinese government “can do it if it wants to.” When asked if he believes that CBDC’s implementation could destabilize the various utilities and benefits of Blockchain’s transparency, Lubin explained:
“China is a business that writes its own rules and has an enormous customer base — 1.4 billion people. That’s a tough economic force to compete with. I do think there’s an instability. I think leaders are constantly terrified of revolution, so they have to keep the people relatively happy at some baseline level.”