How Bitcoin Benefits from Central Bank Digital Currencies, According to Barry Silbert
Barry Silbert, the founder and CEO of Grayscale Investments and Digital Currency Group (DCG), has recently expressed his bullish outlook on Bitcoin in a Grayscale investor call on Feb. 12. He covered different issues related to digital assets, such as the role of Bitcoin in the transfer of wealth across generations, decentralized finance, stablecoins 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. No CBDC has been launched by any global jurisdiction yet, but such projects have been developed and explored by many governments. 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 believes that Bitcoin and other non-central bank cryptocurrencies could benefit from the same infrastructure that is used by the widespread adoption of CBDCs: 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.
As he leads two major companies that are involved in various aspects of digital assets, Silbert is one of the most influential figures in the crypto industry. 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. He has also been critical of some projects, such as Ripple (XRP), which he thinks are centralized and not real cryptocurrencies. He has also projected that most altcoins will go bankrupt in the long run, while Bitcoin will continue to dominate the market.
To conclude, Barry Silbert is a prominent figure in the cryptocurrency industry who suggests that central bank digital currencies are positive for Bitcoin. He maintains that CBDCs will create the infrastructure for institutional interest in non-central bank cryptocurrencies like Bitcoin. He also points out 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: Digital Currency Group and Grayscale Investments.