Binance CEO thinks central banks' digital currencies won't hurt crypto

On Wednesday, the CEO of the world's largest cryptocurrency exchange, Binance, stated that plans by central banks to introduce digital currencies do not pose a danger to other cryptocurrencies because they would confirm blockchain technology and increase sceptics' belief.

The majority of major central banks, including the Federal Reserve of the United States, the Bank of England, and the European Central Bank, are examining the creation of a digital version of their currencies, termed CBDC.

"Is it a threat to Binance or other cryptocurrencies?" I don't believe so. Changpeng Zhao stated at a news conference during Europe's largest digital conference, Web Summit, in Lisbon, "the more we have, the better"

The blockchain technology underlying cryptocurrencies should be made accessible to CBDC and embraced by governments, he stated.

“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”.

Nonetheless, he stated that bitcoin has been extremely associated with the stock market as of late, with both assets correcting sharply when central banks increase interest rates to combat 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.

By fLEXI tEAM