The world is becoming increasingly digital. This is no secret, and has been happening for decades now. This transition has finally made its way into the world’s currencies, not just in the form of digital assets like Bitcoin, but through Central Bank Digital Currencies (CBDCs).
A CBDC is simply a digital representation of a government issued FIAT currency. They boast various benefits over their physical counterparts, typically surrounding efficiency through speed and cost savings.
Over the course of 2020 various nations from around the world have announced intent to develop and distribute a CBDC. Those leading the way include China, Bahamas, Canada, United States, Switzerland, and more.
While one may think that CBDCs stand to potentially ‘steal’ business away from Bitcoin, there are many that feel quite the opposite. Those that feel this way believe that CBDCs will provide increased legitimacy with regards digital assets, bringing higher levels of comfort to currencies like Bitcoin. Essentially, CBDCs may prove to be pivotal, and act as a catalyst, in the adoption of a global currency – and what better asset to fill this role than Bitcoin itself.