The development of a digital dollar by America’s central bank, according to Michael Sonnenshein, CEO of crypto investment firm Grayscale Investments, the world’s largest digital currency asset manager, would generate tailwinds for Bitcoin.
In a recent interview with CBNC’s “Squawk Box,” Sonnenshein suggested that the Federal Reserve’s creation of a digital currency would assist Bitcoin and other cryptoassets.
Payment providers, such as PayPal, have begun to shift gears to give clients decentralized protocols in the form of Bitcoin and other cryptoassets, according to Sonnenshein:
“The emergence of a digital dollar or a federal backed digi asset we actually believe creates a tailwind for investors. Companies like PayPal and others are already including decentralized protocols like Bitcoin and others in their business model.”
More so, Sonnenshein made his remarks in response to a question from co-host Andrew Sorkin. Of course, who suggested that a Fed-backed digital currency would drive companies like PayPal out of business. So, Consumers would have no motivation to choose PayPal over the digital dollar, according to Sorkin. Also, decreasing the former’s margins to zero.
Sonnenshein disagreed, claiming that a digital dollar would be beneficial to both Bitcoin and PayPal. PayPal has also been a key force in Bitcoin adoption, releasing cryptocurrency wallets for consumers in October 2020.
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