Changpeng Zhao, Binance’s enigmatic CEO, believes that a well-designed central bank digital currency could pose a threat to Bitcoin.
In a video interview with Jeff Roberts, Senior Writer at Fortune Magazine, he was asked how the People’s Bank of China digital yuan initiative will affect the cryptocurrency industry.
Zhao responded that any blockchain or digital currency would be beneficial to the industry as a whole as it legitimizes digital assets and increases awareness. He added that while there is currently a race among the major countries to launch one, most central bank digital currencies are likely to be more restrictive in the first place, but will evolve over time.
When asked directly about the threat to Bitcoin, Czechoslovakia replied that very few cryptocurrency coins would have the same freedom as Bitcoin, and that they would be very centralized and controlled. In the long term, however, he warned:
“If there was a government promoting another cryptocurrency that was more open and free and had fewer restrictions than Bitcoin and was faster and cheaper to use, this would threaten Bitcoin. Bitcoin will replace it.
It would be nice, he added, as HTML5 appears to replace HTML4 on the web.
When asked if Binance had any intention of issuing a RMB stack coin to supplement the stock exchange’s stacking coins, Czechoslovakia replied that it would not be available anytime soon. He added that there are too many restrictions on capital outflows from China.
Interest in central bank digital currencies in 2020 is mixed. The German politician and board member of the country’s central bank, Burkhard Paltz, recently said that the digital euro could pose a threat to the financial system if used as a store of value.
The US appears to be in no hurry to launch the digital dollar, but Morgan Creek Digital Co-founder Anthony Pomplano claims the US will support China if it does not take action soon.