Interaction with major crypto-asset platforms could benefit both CBDCs and cryptocurrencies
Cryptocurrencies are an unregulated, ethically dubious financial instrument used by criminal organizations, terrorists and war criminals, writes Andy Holloway in the FP Investor Newsletter. But central bank digital currencies (CBDC) are the right side of regulation. “A CBDC that offers maximal privacy of individuals' spending and is a legal tender would be a more compelling alternative to cryptocurrencies as a pure digital means of payments and money,” says Katrin Tinn, Assistant Professor of Finance at Desautels. “Furthermore, if such CBDCs enable built-in smart contract functionalities and/or ways to interact with major crypto-asset platforms, there are many possible positive synergies. And the most interesting innovations from the crypto-space might even benefit from these CBDCs.”
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