Central Bank Digital Currencies Are Good for Bitcoin, Barry Silbert Says
In a recent Grayscale investor call on Feb. 12, Barry Silbert, the CEO and founder of Digital Currency Group (DCG) and Grayscale Investments, shared his optimistic view on Bitcoin. 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. So far, no global jurisdiction has launched a CBDC, but many governments have been exploring and developing such projects. 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.
Silbert said that central banks that create their own digital currencies could be empowering Bitcoin by building the infrastructure for institutional interest. He claims to have purchased his first Bitcoin in 2012, three years after the first block on the Bitcoin blockchain was created. 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 remarked: “We could have 80 different CBDCs in the future. And if that happens, it would stimulate a massive amount of investment in operators of financial systems where essentially every financial institution would then have to be capable of safely storing and transacting CBDCs and, guess what, if they actually create that infrastructure, that same infrastructure could be applied 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 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. Grayscale Investments is the world’s largest digital asset manager, with over $40 billion in assets under management as of Feb. 12. Various crypto-related projects, such as Foundry, Genesis Trading and CoinDesk, are invested in by Digital Currency Group, which is a venture capital firm.
For a long time, Silbert has been vocal about his bullish views on BTC and other cryptocurrencies. He has also been critical of some projects, such as Ripple (XRP), which he thinks are centralized and not real cryptocurrencies. He has also forecasted that most altcoins will go bankrupt in the long term, while Bitcoin will continue to dominate the market.
To sum up, Barry Silbert is a prominent figure in the cryptocurrency industry who thinks that central bank digital currencies are beneficial for Bitcoin. He contends that CBDCs will create the infrastructure for institutional interest in non-central bank cryptocurrencies like Bitcoin. He also emphasizes 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.