Paolo Ardoino, CTO of Tether, believes that the growing development of central bank digital currencies (CBDCs) around the world will not really affect the role of private stablecoins. Paolo noted that fiat currencies are already digital currencies in essense but due to dependency on the 30 years old technology, these are inefficient and require massive investment in maintenance. Ardoino is of the opinion CBDCs would only replace centralised payment networks as SWIFT and use private blockchains to fulfill most transactions.
Ardoino who posted a thread on Twitter about his views on the growing discussion around CBDCs and their role in the current payment system, explains that CBDCs are not designed to digitise fiat currency, as that something that has already been done, given that most modern transactions are digital.
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Few thoughts on CBDCs
– FIAT is mostly digital already
– but it relies on an outdated tech infra built 30y ago and kept together with rubber and bands
– and it requires ton of maintenance with enormous costs
– and is not standardised at capillary level— Paolo Ardoino (@paoloardoino) March 10, 2022
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– CBDCs will use private blockchain as modern and cost-controlled tech infrastructure
– CBDCs won’t be issued on your favourite chain, private stablecoins will continued to serve that use casePoint being: tech evolves but nothing actually changes.
Only #bitcoin is our edge.— Paolo Ardoino (@paoloardoino) March 10, 2022
Ardoino claims that the main role of CBDCs is to employ private blockchain as a state-of-the-art, cost-controlled technology infrastructure in which the majority of bank transfers and credit/ debit card transactions will be carried out. He does point out the benefits of CBDCs too, stating that their onset will mean quicker settlements of wire transfers, including those that are made of the weekend.
The Tether CTO adds that private stablecoins such as USDT will remain relevant even in the age of government-issued digital currencies since private stablecoins would give users the option to transfer across chains and would be available across multiple blockchains of choice, something CBDCs won’t have on offer.
Paolo Ardoino’s comments on the relevance of private stablecoins at a future of CBDCs arrives at a time when conversations appear to be gathering steam whether private stablecoins will see a dip in demand once CBDCs see wider adoption.
As highlighted by a Cointelegraph report, the Atlantic Council’s CBDC tracker finds that 86 countries, including India, are currently in the process of developing their sovereign digital currency, a number that has doubled since May 2020. Out of these 86 nations, nine countries have already launched their CBDC while fifteen countries are in the pilot phase.
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