Tuesday, October 4, 2022

Tether CTO Says Stablecoins Will Continue to be Relevant Despite CBDCs

As many more thought leaders and governments join in the conversation on what impact the Central Bank Digital Currencies (CBDCs) would have on stablecoins, Tether’s Chief Technology Officer (CTO) Paolo Ardoino has said that CBDCs would only replace the age-old payment systems while it adopts private blockchain as a modern and cost-controlled tech infrastructure.

Ardoino who made his opinion known through a series of tweets said that he strongly believes that in the long run, CBDCs would have not much effect on the role private stablecoins currently play; but rather he envisions private stablecoins serving the purposes that CBDCs cannot. 

According to the CTO of Tether which is the worlds’ largest stablecoin, Ardoino said that going by the fact that most monetary transactions that are carried out in this age are done digitally, CBDCs should therefore not be about making fiat currency digital, but should be about using private blockchains as its underlying framework. 

Ardoino went on to explain that CBDCs are nothing but offspring of the very root idea that led to the birth of Tether – the first-ever stablecoin about 8 years ago. He opined that banks should accept the government-issued digital currencies, while just as it is done with most private stablecoins, CBDCs will settle most of the credit/debit card flow, especially over the weekend.

Making a clearer case for his assertion, the CTO explained that even with government digital currencies in use, a private stablecoin like USDT would afford users the exceptional benefit of being able to transfer their funds across a variety of blockchains which is one of the current limitations of CBDCs.

Nations Join the CDBC Race

With more countries on the developmental path to owning their digital currency, China seems to be on the lead in this race as it is in the process of testing out its digital Yuan across the country.

The nation of Brazil also seems not to be too far behind as its Central Bank only recently chose 9 projects for its CBDC development. Countries like France and Switzerland have also begun a series of trials across their borders.

The Atlantic CBDC tracker has also mentioned that about 86 countries have their digital currency in the pipeline while nine countries amongst them have already launched their own CBDC.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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