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The Future of Crypto
Here’s the Real Enemy of Crypto
No, it’s not fiat currency or gold. Nor is it Elon Musk. It’s far worse.
CBDCs are the real enemy of crypto. A direct threat to the independence of our digital assets, the blockchain, and what we love about web3.
The most alarming news to make the rounds lately, according to a report by the Bank of International Settlements, is that 90% of central banks have created or are currently developing CBDCs.
By 2025, we could see more than 73 countries with a digital national currency accepted as legal tender for goods, services, taxes, and for the repayment of debts.
If it wasn’t obvious by now, nations are tightening their grip around the throat of cryptocurrency. And they are doing this by passing laws, regulations, monetary policies, and now CBDCs.
But to understand how CBDCs are a threat to the broader crypto community, we’ll need to first take a peek at what they are and how they function.
What are CBDCs?
CBDC stands for Central Bank Digital Currency, which is a digital token much like a cryptocurrency.
Fundamentally, CBDCs differ from cryptos like Bitcoin and Ethereum.
In short, CBDCs are digital versions of fiat currencies, developed and issued by central banks. They exist on a centralized blockchain platform and can be used by the public for making payments or settling debts.
Since they are managed by a central authority, CBDCs are not decentralized.
This is a major concern for the crypto community because it goes against the decentralized nature of cryptocurrencies.
After all, decentralization is at the heart of the community. It’s the first principle Satoshi Nakamoto wrote about in his 2008 Bitcoin white paper.
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the…
