Paolo Ardoino, the chief technology officer at Tether, believes the growing developments around central bank digital currencies (CBDCs) will not really impact the role of private stablecoins globally.
Ardoino shared his two cents in a Twitter thread about the growing discussion around CBDCs and what their role could be in the current payment system. He said CBDCs would only replace the old centralized payment networks if SWIFT and use private blockchains to carry out most transactions.
He went on to explain that CBDCs are not about digitizing the fiat currency as it has already been done since most modern transactions are digital. The main purpose of CBDCs is to use private blockchain as a modern and cost-controlled technical infrastructure, where most bank transfers and credit/debit card transactions will be handled through CBDCs.
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– CBDCs are based on the idea that: #tether had created the first stablecoin 8 years ago
– CDBC will replace SWIFT etc
– banks accept transfers through CBDCs as any wire
– CBDCs will settle most of the credit/debit card flow, especially on weekends— Paolo Ardoino (@paoloardoino) March 10, 2022
Tether CTO claimed that private stablecoins like USDT will remain relevant even in the era of government-issued digital currencies, private stablecoins would give users the ability to transfer over chains and would be available through multiple blockchains of their choice, something CBDCs do. won’ not do it.
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– CBDCs will use private blockchain as a modern and cost-controlled technical infrastructure
– CBDCs will not be spent on your favorite chain, private stablecoins will remain serving use caseThe point is: technology evolves, but nothing changes.
Alone #bitcoin is our lead.— Paolo Ardoino (@paoloardoino) March 10, 2022
Tether CTO’s response comes in the wake of the growing debate over whether CBDCs would diminish the role of the private stablecoin sector. A discussion in the United States gained momentum after calls from several lawmakers to regulate the stablecoin market.
According to the Atlantic CBDC tracker, 86 countries are currently developing their sovereign digital currencies, with an increase of more than 100% since May 2020. Of these 86 countries, nine countries have launched their CBDC, while fifteen countries are in the pilot phase. phase.
World CBDC Development Tracker Source: Atlantic Council
Of the world’s major economies, China is leading the CBDC race with a fully functional digital yuan currently being tested across the country. Several European countries, such as France and Switzerland, have started cross-border trials, while the US has no plans for a digital dollar yet.