Binance CEO: CBDCs ‘very positive’ for industry

Central bank digital currencies (CBDCs) could ultimately mean good things for the crypto industry, the CEO of crypto exchange Binance said on Tuesday (December 21).

“Overall, I think the CBDCs are very positive for the crypto industry, but with a few caveats,” Changpeng Zhao wrote on the corporate blog.

Among these caveats? Zhang suspects that most of the initial versions of CBDCs will be different in their fundamental properties from currencies such as bitcoin and ethereum.

He also expects most CBDCs to have unlimited supply, with central banks potentially being able to strike more at will, leading to possible inflation.

“Bitcoin, BNB [Binance Coin], and other cryptocurrencies generally have a limited supply, ”Zheng writes. “BNB even has an integrated decreasing offer, with multiple combustion mechanisms. This generally improves the ability of these coins to act as a store of value. “

He adds that most CBDCs will be licensed.

“If you only buy coffee, it’s probably fine,” Zhang writes. “But for meaningful transactions, such as investing your after-tax money in a project you love in another country, you will likely have to go through a lengthy approval process, and may even be categorically refused depending on the location. where you are or other reasons.

There’s also the issue of high fees, which Zhang says will occur when trading across borders, or any transaction typically associated with high transaction fees.

Read more: Struggling Binance Pulls Out Of Singapore Again

So why does he think CBDCs have some advantage? First, by issuing blockchain digital currencies, central banks will provide solid validation of the blockchain, giving government approval to a technology that was once considered a fad.

Zhang notes that central banks and governments have started educating people about crypto and blockchain, writing that “you can’t learn more about blockchain without learning more about bitcoin.”

Zhang’s comments come just over a week after his company, the world’s largest crypto exchange by volume, pulled out of Singapore, the latest in a series of setbacks for the company.

So far this year, regulators in the UK, Italy, Japan, Thailand, Malaysia, Cayman Islands and Ontario have all accused Binance of operating illegally in their countries.