Bitcoin Set To Face Stiff Competition Against CBDCs

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Bitcoin Digital Dollar (Courtesy: Twitter)
Bitcoin Digital Dollar (Courtesy: Twitter)

Bitcoin has taken the market by storm. Earlier, the printed currency were the only option available in the market, but now with the emergence of Bitcoin – people have their options to select from.

Bitcoin has proved to be a lot more convenient for a lot more users though it has its own drawback and risks attached to it. However, in the recent times, Bitcoin can face massive competition with digital dollar or even central bank digital currencies.

CBDCs and digital dollar are on an upscale as they are ready to take on the market in China. The country is also increasingly working to give rise to its digital yuan.

As of now, the United States, are far from launching the digital dollar. However, there have been arguments, with the recent one coming from ex-RBI governor Raghuram Rajan, who said that Facebook-backed Libra can well be in competition with the CBDCs in the near future.

“I would like to think that [bitcoin and libra] are also in competition with the central bank digital currency,” Rajan told CNBC in an interview.

“The worry with libra was that, in its early forms, it was on the one hand very ambitious in what it wanted to do but very vague in what the safety precautions would be,” he added on Libra trying to emerge as a world currency.

“That’s the worst possibility for central bankers: something that’s going to take over the world but we have no strong confidence in that risks would be contained.”

Not just Rajan, a lot of investors have the same thoughts, and believe that Bitcoin can face a real fight. Moreover, Rajan had also pointed out that CBDCs might result into government outreach.