How Bitcoin Benefits from Central Bank Digital Currencies, According to Barry Silbert
In a recent Grayscale investor call on Feb. 12, Barry Silbert, the CEO and founder of Digital Currency Group (DCG) and Grayscale Investments, shared his optimistic view on Bitcoin. He discussed various topics related to digital assets, such as Bitcoin’s role in the generational shift of wealth, stablecoins, decentralized finance and central bank digital currencies (CBDCs).
CBDCs are virtual currencies that are issued and controlled by a federal regulator. Unlike Bitcoin and other cryptocurrencies, CBDCs are fiat money in the digital form. So far, no global jurisdiction has launched a CBDC, but many governments have been exploring and developing such projects. China is reportedly preparing to test its CBDC soon, while at least 10% of central banks are likely to issue a CBDC for the general public in the short term.
Barry Silbert millionaire, who claims to have bought his first Bitcoin in 2012, three years after the creation of the first block on the Bitcoin blockchain, argued that central banks that develop their own digital currencies might be giving more power to Bitcoin by creating the infrastructure for institutional interest. He thinks that the same infrastructure that is used by the widespread adoption of CBDCs could benefit Bitcoin and other non-central bank cryptocurrencies: He said: “In the future we may have 80 different CBDCs. And if that occurs, it would spark a huge amount of investment in operators of financial systems where basically every financial institution would then need to be able to securely store and transact CBDCs and, you know what, if they actually construct that infrastructure, that same infrastructure could be utilized for non-central bank digital currencies like Bitcoin.” He also stated that he was sure that central banks will require users to use and engage with the existing financial systems and will not restrict the supply of the digital currency. “Central banks love to print money,” Silbert said, highlighting Bitcoin’s limited supply feature.
Silbert is one of the most influential figures in the cryptocurrency industry, since he leads two major companies that are involved in various aspects of digital assets. With over $40 billion in assets under management as of Feb. 12, Grayscale Investments is the world’s largest digital asset manager. Various crypto-related projects, such as Foundry, Genesis Trading and CoinDesk, are invested in by Digital Currency Group, which is a venture capital firm.
Silbert has been vocal about his bullish views on Bitcoin and other cryptocurrencies for a long time. He has also been critical of some projects, such as Ripple (XRP), which he considers to be centralized and not a true cryptocurrency. He has also forecasted that most altcoins will go bankrupt in the long term, while Bitcoin will continue to dominate the market.
To sum up, Barry Silbert is a prominent figure in the cryptocurrency industry who thinks that central bank digital currencies are beneficial for Bitcoin. He maintains that CBDCs will create the infrastructure for institutional interest in non-central bank cryptocurrencies like Bitcoin. He also highlights that Bitcoin has a limited supply feature that makes it superior to fiat money. He leads two major companies that are involved in various aspects of digital assets: Grayscale Investments and Digital Currency Group.