Presented as financial instruments intended to curb the growing adoption of cryptocurrencies, CBDCs could ultimately accelerate it. This is notably the view expressed recently by the CEO of Grayscale Investments who believes that the issuance of the digital dollar will inevitably benefit bitcoin.
An enabling factor that will only reassure investors
In a new interview with CNBC's Squawk Box , Michael Sonnenshein says a federally-backed digital dollar could inspire investors and businesses to take an interest in cryptocurrencies . In particular, he referred to the payment giant PayPal, which now supports the purchase and sale of cryptocurrencies. The CEO of Grayscale Investments assures that he and other companies in the sector will further integrate cryptocurrency into their business models.
" We believe that the emergence of a digital dollar or federally backed digital asset will cause investors to consider decentralized applications, so companies like PayPal and others will further integrate decentralized protocols like the bitcoin and others in their business model. Shedding light on the use of digital assets, we believe is an enabling factor that gives more comfort to investors ,” he said.
CBDCs will not eclipse cryptocurrencies
Mr. Sonnenshein went on to strongly oppose the idea that a CBDC could crowd out companies like PayPal and supplant cryptocurrencies. Rather, he believes that CBDCs will shed more light on the benefits of CBDCs . The CEO of Grayscale Investments notably insisted that the inclusive nature of cryptocurrencies will finally be understood by all once CBDCs are issued by Central Banks.
“ This is not to crowd out, but rather to highlight the use of this technology. It would almost be an enabling factor that would examine the fundamentals of blockchain technology and shed light on the difference between federal or banknote-backed assets and decentralized assets like bitcoin. We have to remember that a big part of the ethos of this ecosystem is to create a more inclusive, fairer financial system and so the more we see adoption around us, the more these ideas permeate investors and users ,” he concluded.
The issuance of CBDCs will therefore only legitimize the use of cryptocurrencies by highlighting their advantages. This unexpected boost from central banks should thus allow bitcoin to obtain more support from investors and the public. This should therefore result in a substantial increase in its value according to the CEO of Grayscale Investments.