How Bitcoin Benefits from Central Bank Digital Currencies, According to Barry Silbert
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 discussed various topics related to digital assets, such as Bitcoin’s role in the generational shift of wealth, stablecoins, decentralized finance and central bank digital currencies (CBDCs).
CBDCs are virtual currencies that are issued and controlled by a federal regulator. CBDCs are different from cryptocurrencies like Bitcoin because they represent digital forms of fiat money. No CBDC has been launched by any global jurisdiction yet, but such projects have been developed and explored by many governments. While China is reportedly getting ready to test its CBDC soon, at least 10% of central banks are expected to issue a CBDC for the general public in the near future.
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 suggests that Bitcoin and other non-central bank cryptocurrencies could gain 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 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 noted, pointing out 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. With over $40 billion in assets under management as of Feb. 12, Grayscale Investments is the world’s largest digital asset manager. Digital Currency Group is a venture capital firm that invests in various crypto-related projects, such as CoinDesk, Foundry and Genesis Trading.
For a long time, Silbert has been vocal about his bullish views on BTC and other cryptocurrencies. Some projects, such as Ripple (XRP), which he regards as centralized and not genuine cryptocurrencies, have also been criticized by him. He has also projected that most altcoins will go bankrupt in the long run, 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 argues that CBDCs will create the infrastructure for institutional interest in non-central bank cryptocurrencies like Bitcoin. He also highlights 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.