Changpeng “CZ” Zhao also says CBDCs may have positives and an option, but governments shouldn’t seek to regulate them independently.
Binance CEO Changpeng Zhao, one of the most prominent figures in crypto, has cautioned that governments should not seek separate regulatory oversight for cryptocurrencies and for central bank digital currencies (CBDCs).
He also says that while CBDCs have several positives, there are “few caveats.”
Notably, the Binance chief says he sees central bank-issued digital currencies as the biggest validation of blockchain technology.
Changpeng “CZ” Zhao believes central banks digital currencies (CBDCs) have the potential to benefit the broader crypto ecosystem but says governments should not look to oversight the sector in its usual “walled-garden nature.”
The Binance chief made the comments in a blog post published Tuesday, where he responded to the question of CBDCs as part of his CZ’s FAQs Series.
He says there are positives and negatives to the issue of central bank digital currencies, but one of the most obvious things to note about the continued focus on and issuance of these by governments is that it provides a “strong validation of the blockchain technology” underpinning cryptocurrencies.
“As recently as 2 years ago, we heard newcomers worry that the technology may be a fad. Now with central banks adopting it, we don’t hear those concerns anymore,” he wrote.
CBDCs can help educate people about Bitcoin
He also sees CBDCs as key to the crypto industry as through them, the masses can learn about blockchain and crypto. He notes that educating the masses about blockchain also educates them about Bitcoin.
According to him, learning about Bitcoin exposes people to the “valuable fundamental properties of money – scarcity, freedom to transact, and low fees.”
Among risks he associates with CBDC developments, the Binance CEO highlights a possibility that some governments “ban[s] Bitcoin” in order to promote their own CBDC.” CZ, however, clarifies that so far no country has banned Bitcoin and that so far, bans have only affected crypto exchanges in those countries.
Several countries are aggressively pursuing CBDCs, while at the same time seeking to introduce regulations that might hinder the broader crypto industry.
Zhao says governments should not put forth different regulatory environments for CBDCs and for cryptocurrencies. According to him, adopting “restrictions and barriers” will likely stifle the very innovation and technology governments rely upon for the development of the national digital currencies.