CBDCs won’t impact the private stablecoin market, according to Tether CTO

Tether’s chief technology officer Paolo Ardoino believes that global developments in central bank digital currencies (CBDCs), wouldn’t have any impact on private stablecoins.

Ardoino offered his thoughts in a Twitter thread about the growing debate around CBDCs, and their potential role in the current payment system. He stated that CBDCs will only replace old centralized payment networks like SWIFT, and instead use private blockchains for most transactions.

He explained that CBDCs do not aim to digitize fiat currencies as they have been done in the past, since most modern-day transactions can be made digitally. CBDCs are a private blockchain infrastructure that allows for the settlement of most bank transfers as well as credit/debit card transactions. This is where the main purpose of CBDCs lies.

Tether CTO stated that private stablecoins like USDT will continue to be relevant in an age of government-issued digital currency. Private stablecoins would allow users to transfer across chains and would also be available across multiple blockchains, something CBDCs can’t do.

Ardoino’s reply comes amid growing controversy about whether CBDCs will reduce the role of private stablecoin sectors. After calls from many lawmakers to regulate stablecoin market, a discussion grew in the United States.

The Atlantic CBDC tracker shows that 86 countries are in the process to develop their sovereign digital currencies. This is an increase of more than 100% since May 2020. Nine countries have already launched their CBDC, while 15 countries are still in the pilot phase.

World CBDC Development Tracker Source: Atlantic Council

China leads the CBDC race, with a fully functioning digital yuan being tested across the country. While several European countries, including France and Switzerland, have begun cross-border trials for digital dollars, the U.S. has not yet finalized any plans.

Opinion writer on 7trade7