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Intro: Grayscale CEO, Micheal Sonnenshein expressed that the digital dollar will not harm bitcoin’s market share. However, the debate is ongoing about which is the better currency between the digital dollar or cryptocurrency.
Digital dollar vs cryptocurrency is a long going debate that has been doing the rounds among lawmakers, traders and crypto enthusiasts. Where one agrees that digital currency is the future, the other feels that cryptocurrency is the way forward.
Micheal Sonnenshein, CEO, Grayscale Investment during an interview with one of the media publications, has expressed that the digital dollar will not harm bitcoin’s market share. He believes that bitcoin is more attractive for individuals seeking to invest in cryptocurrencies
According to him, a digital dollar is all about digitizing money to serve the average person. But, those who are looking to make gains will be pushed towards bitcoin only.
He further added that there is a digital dollar project underway but there are also many countries that are launching their digital currency, the central bank or CBDC.
Talking on the lines of Grayscale CEO, Greg King, Osprey Funds CEO also opines that people will move towards decentralized cryptocurrencies like bitcoin, once the money is digitized. The introduction of CBDC will help drive crypto adoption.
He also added that the government is concerned about rolling the central banks digital currency CBDC and of late many countries are searching for viable options for CBDCs.
Experts have also said that China is one such country that is all set to launch its digital Yuan. The Federal government has also indicated that it will need help from Congress before adopting the digital dollar plan. On the other hand, lawmakers are still doubtful of the idea.
Wall street concern over digital currency
Wall Street feels that the next big issue to handle is the idea of central bank digital currency. Even though the Federal government is likely a few years from now to develop its digital currency.
Digital currency is growing interest among many countries now. In countries like China, which is all set to launch Yuan, and as small a country as the Bahamas, digital currency is attracting more interest as the future of an increasingly cashless society.
The digital dollar is similar to cryptocurrencies like bitcoin and ethereum in some limited respect but different in important ways. Rather than be a tradable asset with wildly fluctuating prices, the central bank digital currency would function more like dollars and wildly accepted. It will be fully regulated under the central authority.
Analysts believe that moving towards digital currency will disrupt the financial system. There are efforts put on gaining momentum on CBDCs with approximately 86% of the central banks worldwide are exploring digital currencies.
Areas of worry
One of the main areas of worry is the implementation of the digital dollar currency. Another concern is the speed, transfer payments such as those provided by governments to people during the pandemic, would be done faster if that money is deposited directly into a digital wallet.
People who will be benefited from this are the vulnerable ones as they will have a channel to pay and receive money instantly in their wallet at a time when the world is hit by a coronavirus. But the potential losers will be the financial institutions, both in traditional banking and fintech. It is because people will put their money in wallets or the central bank’s accounts.
Future of digital money
As the central bank is working upon the logistical issues, Wall Street is worried about the future. Citigroup in its report has mentioned that there is cutthroat competition towards digital money 2.0. Some call it a space race or digital currency cold war. But Citigroup feels that there is a lot of room for digital currency to grow. It cannot be a zero-sum game.
Nevertheless, the game is on and China has taken a lead by working upon Yuan as a digital currency and launching it in the country. With the launch of the Yuan, there is a fear that it will drop the prices of the dollar and will undermine its status as the world’s reserve currency. Though China denies it is not the objective, Bank Of America feels that issuing digital dollars will let the U.S. currency highly competitive, in comparison to other currencies.
Now, many nations are looking forward to moving this project forward after China and the Bahamas has rolled the dice.
Now the time will only tell whether the digital currency will prove to be beneficial for the people or the cryptocurrency continues to grow at a much faster rate of adoption. With the senate between the two seems to be running long, it is wise to leave it on the people to decide which side they favour.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
