BDC stands for Central Bank Digital Currency. Many crypto investors believe in bitcoin, while others believe it is a fluff theory. This blog will be a battle of narratives between Bitcoin and CBDC.
What’s CBDC?
CBDC, or Central Bank Digital Currency, is a virtual version of a country’s fiat currency. Fiat currency can be described as a country’s currency, such as INR for India or USD for the USA. SGD is for Singapore. It is managed by the government of that nation. The CBDC is governed by a monitoring authority. It’s RBI in India’s case. We have fiat money right now. The government now wants to create a digital version of this money. This is called CDBC.
Assume you have one lakh rupees. You have twenty thousand cash, but only eighty thousand remaining in your bank account. The eighty thousand doesn’t count as cash in your bank account. It is in a node on a computer. It can be accessed by any payment app. Now, RBI has stated that India has a lot fiat currency. This is why RBI launched CBDC. All other countries are also launching fiat currencies.
Why have CBDC been launched not only by India, but by other countries around the globe?
Sweden will launch its own CBDC called e krona. This is because a lot their young population uses virtual payments, not cash. They are also launching CBDC to speed up the process.
Let’s now look at Us. It is interesting that Us doesn’t have a strong currency system like India. We pay almost nothing for digital payments in India other than NEFT and RTGS or IMPS. You pay almost nothing if you pay through GoolePay. It’s not the same in Us. They are charged more for digital payments. To reduce transaction fees, Us launched CBDC.
According to RBI, India will launch its own CBDC in order to increase digital payments penetration. This is expected to happen by the fiscal year 2022-2023. Its implementation will begin on April 1, 2019. The Reserve Bank of India has already imposed a 30% tax for any cryptocurrency. This will also be applied during the fiscal year 2022-2023.
Who will ultimately win between BITCOIN, CBDC and WHY?
Let’s take a look at each point. The internet is a network. We all know that. To make this network more appealing and useful, we need more software engineers. This will allow us to develop more software for the internet. In return for that engineers will earn handsomely. It’s a win/win situation for both users and creators.
When the government claims that it is making CBDC, they are essentially trying to create a network. This network can only work if software developers are able to create software, and software users find the software useful.
All networks are distinct, including Bitcoin, Ethereum and Solana. Many applications can run on these networks. DAO, NFT Marketplace, Metaverse. It is becoming a popular platform for developers to develop software. This is why companies such as Nike, Microsoft, and Facebook are all moving to the market. However, if CBDC is launched by the government without a clear use case, neither developers nor growth will be possible.
There is a concept known as centralization and decentralization in the blockchain narrative. People prefer to see, or developers prefer to develop, a decentralization network. Mark Zuckerberg, Facebook CEO, launched Libra cryptocurrency. Mark Zuckerberg, the CEO of Facebook, launched Libra, a cryptocurrency that is based on a central project.
The government also wants to create a central network similar to Mark Zuckerberg. Mark Zuckerberg, despite his wealth and power, could not sustain a central network. It is now a question how the government will sustain CBDC. However, it is possible for every country to develop its own CBDC which will make it very easy to transfer money from one country to the next.
Conclusion
CBDC is currently in a situation where the government does not ban cryptocurrency. It will duplicate many of the existing market items.
