Cyprus Mail
BusinessCryptocurrencies

Binance CEO sees no threat to crypto from central banks’ digital currencies

binance
Zhao Changpeng, founder and chief executive officer of Binance, attends a conference at Porte de Versailles exhibition center in Paris, France June 16, 2022. REUTERS/Benoit Tessier/File Photo

Plans by central banks to launch digital currencies are not a threat to other cryptocurrencies as they would validate blockchain technology and build trust among sceptics, the CEO of the world’s largest crypto exchange, Binance, said on Wednesday.

Most major central banks, including the US Federal Reserve, the Bank of England and the European Central Bank, are studying the potential launch of a digital version of their currencies, dubbed CBDC.

“Is it (CBDC) a threat to Binance or other crypto-currencies? I don’t think so. I very much think that the more we have, the better,” Changpeng Zhao told a news conference during Europe’s largest tech conference, the Web Summit, in Lisbon.

He said the blockchain technology behind cryptocurrencies should be available for CBDC and adopted by governments.

“It will validate the blockchain concept, so that anybody who still has concerns about the technology, will say: ‘OK, our government is using the technology now’,” Zhao said.

“So, all those things are good,” he said, adding that CBDC would still be different from native crypto as “cryptocurrency is a deflationary asset”.

Still, he said, recently cryptocurrency has been highly correlated with the stock market, with both assets correcting sharply as central banks hike interest rates to control record inflation.

“In theory they should be inversely correlated, but today they go the same way, mainly because most of the people who trade on crypto (assets) also trade stocks,” he said.

“When the Fed raises interest rates, and the stock market crashes, they want more cash, so they sell crypto. This is because the user base is still very highly correlated,” he said.

Follow the Cyprus Mail on Google News

Related Posts

Cyprus sees surge in deposits and loans in February

Kyriacos Nicolaou

Kedipes makes largest ever payment to the state

Kyriacos Nicolaou

Cyprus industrial production index sees 4.2 per cent increase in January

Kyriacos Nicolaou

Companies sell their businesses in Russia

Reuters News Service

Cyprus Business Now

Kyriacos Nicolaou

UBS flags commercial real estate downturn as a top risk

Reuters News Service