Horizon Labs Co-Founder: CBDCs Could Increase Awareness of Bitcoin

In 2020, central bank digital currencies have gained traction around the world as all of the world's largest economies are considering producing their own digital currencies. But if every country launches its own CBDC, how will CBDC affect Bitcoin (BTC)? Dean Steinbeck, co-founder and COO of Horizon Labs, believes that on the surface, the core environment around Bitcoin will not change.

“There has been a lot of activity internationally recently, with governments exploring the development of native virtual assets,” Steinbeck, who also serves as general counsel at Horizon, told Cointelegraph. He added: “A healthy, robust virtual asset ecosystem has the potential to lead to broader financial inclusion, more efficient markets, and more.”

In 2020, China seems to be ahead in CBDC and continues to develop such assets. On the other hand, although the United States has recently emphasized its attention to CBDC, it prefers to position itself to focus on accuracy rather than rushing to bring CBDC to the market.

“It’s hard to say how the growing interest behind CBDCs will impact Bitcoin or cryptocurrencies in general,” Steinbeck said, adding:

“Bitcoin’s goal has always been to operate outside of government control in a peer-to-peer fashion, so on the surface, for those attracted to Bitcoin in principle, not much will change. However, it remains to be seen whether governments will start trying to crack down on digital assets they believe operate outside of the ‘proper’ system.”

Bitcoin is a borderless asset operated by people and code, and its value is pegged to national currencies. In contrast, countries will peg the value of CBDCs to their fiat currencies, although the specific regulations are not yet clear. Decred co-founder Jake Yocom-Piatt recently said that stablecoins pegged to the value of national currencies may be affected by CBDCs in the future.

“I believe that collective awareness of censorship, among many other variables, will promote a bright future for cryptocurrencies,” Steinbeck said. “More widespread awareness of the benefits of digital currencies such as CBDCs also has the potential to make the world of crypto more accessible to ordinary users.”

Earlier today, France continued its CBDC testing with an interbank payments pilot.

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