Ethereum co-founder believes that CBDCs are good for macroeconomics, but there are also certain challenges.
Central bank digital currencies, or CBDCs, will be fairly easy to convert into cryptocurrencies in the future, Ethereum co-founder Vitalik Buterin believes.
Speaking at the Singapore Fintech Festival 2020 on Dec. 9, Buterin said that he expects a lot of ways to exchange CBDCs to cryptos like Bitcoin (BTC) as well as other digital tokens:
“There’s a question of how these central bank [digital] currencies are going to interact with both crypto and digital currencies more generally. There’s going to be more digital assets of many different kinds coming over the next few decades. I expect that there will be a lot of opportunities to fairly exchange between different kinds of assets and move from one ecosystem to another.”
Buterin also expressed optimism over global CBDC development, noting that central bank digital money has a lot of potential benefits like simplifying macroeconomics. However, the concept of a CBDC comes with a lot of associated concerns like privacy issues, Buterin noted.
At the event, Buterin also briefly spoke about blockchain-based tracking of COVID-19 vaccines distribution, noting that this is a good example of supply chain use cases.
The Ethereum co-founder was confident that blockchain will bring even more similar use cases in the future, especially powered with increasing scalability. “In the case of vaccines for COVID-19 specifically, the main challenge is that it takes time to build these things, and people want to get these vaccines fairly quickly so the world can get back to normal,” he added.
The concept of CBDC has emerged as one of the biggest trends in monetary policy over the past two years with countries like China and Sweden piloting digital fiat currencies. In mid-November 2020, Deutsche Bank, the largest banking institution in Germany, predicted that CBDCs will replace cash in the long term.