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Steami’s co-founder says CBDCs will co-exist with cryptocurrencies

Finance

invezz.com 17 May 2021 19:41, UTC
  
Reading time: ~2 m

Junhaeng Lee, the CEO, and co-founder of Streami, a Seoul-based blockchain company that operates South Korea’s largest crypto exchange Gopax, believes central bank-issued digital currencies (CBDCs) and cryptocurrencies will co-exist. He revealed this news during an interview on May 17. Explaining why he thinks the two classes will co-exist, Lee said cryptocurrencies have traits that CBDCs cannot compete against.

In the interview, Lee said that cryptocurrencies, especially BTC, have use cases that vary from those of CBDCs. According to him, the applications of CBDCs range from paying taxes to paying for products and services. On the other hand, BTC’s primary use case is being a store of value, a trait that makes it compete against gold and treasury bills. As such, BTC cannot compete against currencies, be they fiats or CBDCs.

To this end, Lee noted that BTC will exist parallel to CBDCs, only that it would work as a store of value that can be collateralized and applied to a smart contract-based blockchain application that a wider group of people across the globe can access.

BTC’s volatility does not affect its fundamentals

When asked about his thoughts on BTC’s volatility, especially now that tweets from Elon Musk seem to be dictating the coin’s price, Lee said he doesn’t think price volatility does not have anything to do with the fundamentals of BTC. He added that the principles on which BTC is built are quite strong.

Before Lee, Changpeng Zhao, the CEO of Binance, the largest crypto exchange by trading volume, said CBDCs and public cryptocurrencies would only co-exist for a short time. According to him, CBDCs will differ from conventional cryptos in many ways. For instance, CBDCs will not offer the same freedom as public cryptos. Also, they won’t have a finite supply cap, and Zhao believes this will put off a lot of crypto adopters who got into the industry because of these very reasons.

He added that,

Most central-bank digital currencies are going to have a lot of control attached to them. At the end of the day, those are core properties that users care about.

BTC and most of the crypto market plunged after Elon Musk announced that Tesla had stopped accepting BTC payments until BTC miners find a sustainable energy source. On the heels of this announcement, BTC/USD lost 25.49% of its value over the past seven days to trade at $42,703.32 (£30,202.50), at the time of writing.


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