Lisbon: According to the CEO of Binance, the world’s largest cryptocurrency exchange, central banks’ plans to introduce digital currencies will ensure blockchain technology and win over skeptics, not pose a threat to other cryptocurrencies.
Most notable central banks, including the US Federal Reserve, the Bank of England and the European Central Bank, are considering the future introduction of a digital version of their own currency, known as CBDC.
I firmly believe that wealth is better,” Changpeng Zhao stated at a press conference held during the Web Summit, Europe’s largest technology conference. He argued that governments should and should use the blockchain technology used by cryptocurrencies. Available to CBDC.
According to Zhao, the blockchain concept will be “validated”, “those who still have doubts about the technology will say: OK, our government is now adopting the technology.” Thus, he concluded, “all those things are fine,” noting that CBDC would still be different from local cryptocurrencies because “cryptocurrency is a deflationary asset.”
However, he added, there has been a strong correlation between the cryptocurrency market and the stock market in recent times, with both assets seeing dramatic corrections when the central bank raises interest rates to control record inflation.
“They sell cryptocurrencies to raise cash when the Fed raises interest rates and the stock market crashes. This is due to the consistently high degree of correlation of the user base,” he explained.