Bittime - In the midst of the rapid development of blockchain and cryptocurrency technology, Central Bank Digital Currency (CBDC) has emerged as a new phenomenon that is attracting attention.
This digital currency issued by a central bank brings a new narrative and great potential for the future of finance, including in the crypto world.
What is CDBC Narrative?
Narrative CBDC is a crypto asset project that has ideas for a CBDC-friendly blockchain infrastructure to create a digital currency that can be issued and controlled by a country's central bank.
What is CDBC?
CBDC (in English: Central Bank Digital Currency, abbreviated as CBDC), is a digital currency issued and controlled by a country's central bank.
In contrast to cryptocurrencies which are decentralized and operated by global computer networks, MD-BS is supervised and regulated entirely by the government.
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Characteristics of CBDC
There are several characteristics of CBDC, here is an explanation.
Fiat Based
CBDC does not have an underlying asset like gold or Bitcoin . Its value is guaranteed by the government and central bank, like traditional Fiat currency.
Centralized
In contrast to cryptocurrencies which are decentralized and operated by global computer networks, CBDCs are fully controlled and supervised by central banks.
Publication Objectives
CBDCs are issued with various objectives, such as increasing the efficiency and security of transactions, encouraging financial inclusion, and strengthening monetary controls.
Also Read: What is online vs offline CBDC?
Impact of CBDC on Crypto Markets
Even though it seems centralized and contrary to the ideology of decentralization in the crypto world, CBDC actually opens up interesting new opportunities. Among the impacts of CBDC on the crypto market, include the following.
Increase Collaboration
CBDC requires collaboration between governments and blockchain developers. This opens up opportunities for crypto companies to collaborate with central banks in developing CBDC technology and infrastructure.
Opening TradFi Access
The entry of central banks into the digital realm through CBDC will encourage traditional financial institutions (TradFi) to start looking at and investing in crypto assets. This will increase liquidity and expand the investor base in the crypto market.
Increasing Regulation
The issuance of a CBDC will encourage the government to clarify regulations regarding crypto, create legal certainty and increase investor confidence.
Opening New Opportunities for DeFi
CBDC technology can be integrated with DeFi , enabling the development of innovative financial products and services that are more efficient and secure.
3 CBCD Narrative Coins That Are Currently Hype
There are 3 CBCD Narrative Coins that are worth monitoring, including:
1. Ripple (XRP)
Ripple (XRP) is working with banks in various countries to facilitate fast and cheap international money transfers using XRP blockchain technology.
2. Chainlink (LINK)
Chainlink provides an oracle solution that allows real-world data to be integrated with blockchain, facilitating various CBDC use cases such as cross-border payments and international trade.
3. Quant (QNT)
Quant offers Overledger DLT technology that enables interoperability between various blockchains and CBDC networks, increasing efficiency and compatibility.
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Conclusion
CBDCs are not a threat to crypto, but rather an opportunity to expand the reach and increase the utility of blockchain technology.
Collaboration and proper regulation will drive mass adoption of crypto and pave the way for a more integrated and efficient financial future.
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Read Also:
Understanding Central Bank Digital Money (CBDC) Privacy Issues
CBDC: Safe and Practical Digital Money of the Future!
Wholesale CBDC vs Retail CBDC: Here's What You Need to Know!
DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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