How Bitcoin Benefits from Central Bank Digital Currencies, According to Barry Silbert
On Feb. 12, Barry Silbert, the founder and CEO of Digital Currency Group (DCG) and Grayscale Investments, spoke about his positive perspective on Bitcoin in a Grayscale investor call. 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).
A federal regulator issues and controls CBDCs, which are digital currencies. Unlike Bitcoin and other cryptocurrencies, CBDCs are fiat money in the digital form. Many governments have been developing and exploring such projects, but no global jurisdiction has launched a CBDC yet. 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.
He claims to have acquired his first Bitcoin in 2012, three years after the creation of the first block on the Bitcoin blockchain. Silbert stated that by developing the infrastructure for institutional interest, central banks that make their own digital currencies might be strengthening Bitcoin. 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 expressed confidence that central banks will require users to use and engage with the existing financial systems and will not limit the supply of the digital currency. “Central banks love to print money,” Silbert noted, pointing out 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. As of Feb. 12, Grayscale Investments is the world’s largest digital asset manager, with more than $40 billion in assets under management. Digital Currency Group is a venture capital firm that invests in various crypto-related projects, such as CoinDesk, Foundry and Genesis Trading.
Silbert has been vocal about his bullish views on Bitcoin and other cryptocurrencies for a long time. Some projects, such as Ripple (XRP), which he regards as centralized and not genuine cryptocurrencies, have also been criticized by him. He has also predicted that most altcoins will experience bankruptcy in the long run, while Bitcoin will continue to dominate the market.
In conclusion, Barry Silbert is a prominent figure in the cryptocurrency industry who believes that central bank digital currencies are good for Bitcoin. He argues 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.