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.
2/- CBDCs were created on the basis of the idea that #tether 8 years ago created the first stablecoin
CDBC will replace SWIFT etc
Banks will accept wire transfers via CBDCs.
CBDCs can settle the majority of credit/debit card flows, particularly over weekends— Paolo Ardoino (@paoloardoino)
March 10, 2022
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.
3/
Private blockchain will be used by CBDCs to build modern, cost-controlled tech infrastructure
CBDCs won’t be issued on your favorite chain. Private stablecoins will continue to serve this use case.The point is that tech changes but not technology.
Our edge is #bitcoin.— Paolo Ardoino (@paoloardoino)
March 10, 2022
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.
