The CEO of cryptocurrency exchange Binance does not see central bank digital currencies (CBDCs) as a threat to cryptocurrencies, like bitcoin and ether. “It will validate the blockchain concept so that anybody who still has concerns about the technology will say: ‘Ok, our government is using the technology now,’” he opined.
CZ Sees No Threat to Crypto Coming From CBDCs
Binance CEO Changpeng Zhao (CZ) said Wednesday that he believes central bank digital currencies (CBDCs) are not a threat to cryptocurrencies, like bitcoin (BTC) and ether (ETH), Reuters reported.
According to the Bank of International Settlements (BIS), nine out of 10 central banks are exploring launching their own digital currencies. The Atlantic Council’s CBDC tracker shows that 105 countries are currently exploring central bank digital currencies.
Zhao was asked during a news conference at the Web Summit in Lisbon whether CBDCs could pose a threat to Binance and cryptocurrencies, like bitcoin and ethereum. He replied:
Is it a threat to Binance or other cryptocurrencies? I don’t think so. I very much think that the more we have, the better.
He emphasized that blockchain technology should be available for CBDCs and adopted by governments
The Binance CEO opined:
It will validate the blockchain concept so that anybody who still has concerns about the technology will say: ‘Ok, our government is using the technology now.’
“So, all those things are good,” he continued, adding that CBDCs would still be different from native crypto.
Crypto’s Correlation With Stock Market
The Binance chief also mentioned that cryptocurrency has been highly correlated with the stock market. However, bitcoin’s volatility recently fell below that of the Nasdaq and the S&P 500, according to crypto data provider Kaiko.
Zhao, whose company invested $500 million in Twitter when the social media platform was acquired by Tesla CEO Elon Musk, explained:
In theory, they should be inversely correlated, but today they go the same way, mainly because most of the people who trade on crypto also trade stocks.
“When the Fed raises interest rates and the stock market crashes, they want more cash, so they sell crypto. This is because the user base is still very highly correlated,” the executive concluded.