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

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LISBON, Nov 2 (Reuters) — 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 U.S. 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. read more 

“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.

Report­ing by Ser­gio Goncalves and Cata­ri­na Demo­ny; edit­ing by Andrei Khalip and Elaine Hardcastle

Our Stan­dards: The Thom­son Reuters Trust Principles.

Cata­ri­na Demony

Thom­son Reuters

Por­tu­gal-based mul­ti­me­dia cor­re­spon­dent report­ing on pol­i­tics, eco­nom­ics, the envi­ron­ment and dai­ly news. Pre­vi­ous expe­ri­ence in local jour­nal­ism in the UK., co-found­ed a project telling the sto­ries of Por­tuguese-speak­ers liv­ing in Lon­don, and edit­ed a youth-led news site.

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