CBDCs will have no impact on the private stablecoin market, according to Tether’s CTO

CBDCs, according to Tether CTO Paolo Ardoino, will predominantly replace old-school payment systems and use private blockchain as a contemporary, cost-controlled tech infrastructure.

Tether’s chief technology officer, Paolo Ardoino, believes that global advancements in central bank digital currencies (CBDCs) will have little impact on the function of private stablecoins.

Ardoino added his two cents to the increasing debate over CBDCs and their potential function in the present payment system in a Twitter thread. CBDCs, he added, would only be used to replace old-school centralised payment networks like SWIFT, with most transactions taking place on private blockchains.

He went on to say that CBDCs aren’t about digitising fiat currency, which has already been done, given that the majority of modern-day transactions are digital. CBDCs’ main purpose is to employ private blockchain as a modern and cost-controlled digital infrastructure, with CBDCs handling the majority of bank transfers and credit/debit card transactions.

Tether’s CTO claims that private stablecoins like USDT will continue to be significant even in the age of government-issued digital currencies since private stablecoins allow users to transfer between chains and are available on many blockchains of their choice, while CBDCs do not.

Tether’s CTO’s reaction follows a growing debate about whether CBDCs will reduce the role of the private stablecoin sector. After numerous senators called for the stablecoin market to be regulated, a debate erupted in the United States.

According to the Atlantic CBDC tracker, 86 countries are actively developing their own sovereign digital currency, representing a 100 percent rise since May 2020. Nine of the 86 countries have already launched their CBDCs, with fifteen more in the prototype stage.

China is leading the CBDC race among the world’s main economies, with a fully functional digital yuan now being tested across the country. Several European countries, like France and Switzerland, have begun cross-border testing, but the United States has yet to formalise any plans for a digital currency.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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