The discussion surrounding Central Bank Digital Currencies has gathered steam since COVID19 was declared a pandemic.
The team at Grayscale suggests the launch of CBDCs will provide a gateway for further Bitcoin adoption.
China is the first country to pilot the use of its very own Digital Yuan.
All bets are on the United States creating a Digital Dollar.
In a recent report, the team at Grayscale has postulated that the launch of Central Bank Digital Currencies (CBDCs) will further increase the adoption of Bitcoin (BTC). According to Grayscale, CBDCs will facilitate further Bitcoin adoption by providing the infrastructure and education that would usher in new users of BTC.
Additionally, the report pointed out that the scarcity of BTC would highlight the fact that Bitcoin is special and different from fiat currencies.
…if CBDCs are successfully launched, the infrastructure and education that would accompany the use of these bearer assets could serve as a gateway for further adoption of Bitcoin and other digital currencies.
Moving fiat currencies to digital infrastructure would highlight that Bitcoin is special not because it is digital, but because Bitcoin is a scarce, uncompromising, apolitical currency that is open for anyone to use.
The conversation over the issuance of Central Bank Digital Currencies has gathered steam since it was discovered that physical cash could be aiding in the spread of COVID19. At the time of writing this, China has already started pilot tests of its digital Yuan with many analysts speculating that the United States will soon follow suit or risk playing a game of catch with China.
How the Digital Yuan Will Work
Once launched, the Digital Yuan will be managed via a wallet application authorized by the People’s Bank of China and linked to the users’ regular bank card. Users of the Digital Yuan will then be able to pay for goods or services through their mobile phones as well as receive funds directly into their wallets. One unique aspect of the digital wallet for the Yuan is that users can make transactions without a mobile connection using a function called ‘touch and touch’. This feature allows two users to simply touch their mobile devices together to make a transfer.
All Bets Are on the US Launching of a Digital Dollar
The progress of China in issuing a Digital Currency has not escaped the eye of the United States. Earlier this year, the use of a digital dollar was mused as a means of distributing stimulus checks to Americans to speedily cushion them from the economic effects of the Coronavirus. This idea was later replaced by physical checks but the pressure for the USA to compete with China might just see a digital Dollar launched soon.