Binance CEO warns US CBDC primed to fail as they set for trial

TL;DR Breakdown

  • Zhao warns US CBDC may fail
  • US set to begin CBDC trial

Binance CEO Changpeng Zhao has sounded a note of caution ahead of the conduct of Central Bank Digital Currency, CBDC trials in the United States.

Zhao lashed out his warning in a Bloomberg interview on Monday. He explained that central bank digital currencies wouldn’t offer crucial features of cryptos like Bitcoin freedom of use and limited supply.

The Binance CEO noted that CBDCs might be primed for failure as the difference between CBDCs and private crypto will make the central bank-controlled currency unattractive to people in the crypto industry.

He emphasized that the Central Banks currencies are undoubtedly going to have a lot of control attached to them.

Zhao’s remarks on CBDCs come as the U.S. moves forward with its CBDC trial plans, announcing five pilot digital dollar programs on Monday.

U.S. set for CBDC trial

Fortune 500 company alongside Accenture has teamed up with Digital Dollar Foundation to test the US CBDC.

The CBDC test would be carried out in five CBDC pilot programs over the next 12 months. The test primarily aims to generate data to inform U.S. policymakers on developing a domestic digital currency.

Three pilot programs would launch first in the next two months, generating data on a digital greenback’s functional, sociological, and business benefits.

Christopher Giancarlo, former Commodity Futures Trading Commission and co-founder of the Digital Dollar Foundation, emphasized the need for the trial.

He notes that conferences and papers are coming out every week around the world on CBDCs based on data from other countries, but there are no real data and testing from the United States to inform that debate.

However, previous reports have it that the Fed, led by Jerome Powell, is taking a cautious approach as they try to protect the world’s reserve currency.

Giancarlo, however, countered Powell saying that the Fed chair was correct to be cautious, but warned that the U.S. could fall further behind as China pushes ahead with its own CBDC testing and deployment.