Barry Silbert Explains Why Central Bank Digital Currencies Boost Bitcoin
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 digital currencies that a federal regulator controls and issues. 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.
Silbert said that central banks that create their own digital currencies could be empowering Bitcoin by building the infrastructure for institutional interest. He claims to have purchased his first Bitcoin in 2012, three years after the first block on the Bitcoin blockchain was created. He thinks that the same infrastructure that is used by the widespread adoption of CBDCs could benefit Bitcoin and other non-central bank cryptocurrencies: He remarked: “We could have 80 different CBDCs in the future. And if that happens, it would stimulate a massive amount of investment in operators of financial systems where essentially every financial institution would then have to be capable of safely storing and transacting CBDCs and, guess what, if they actually create that infrastructure, that same infrastructure could be applied for non-central bank digital currencies like Bitcoin.” He also said that he was confident that central banks will not cap the supply of the digital currency and will require users to engage and use the existing financial systems. “Central banks love to print money,” Silbert said, highlighting Bitcoin’s limited supply feature.
Silbert is one of the most influential figures in the cryptocurrency industry, since he leads two major companies that are involved in various aspects of digital assets. As of Feb. 12, Grayscale Investments is the world’s largest digital asset manager, with more than $40 billion in assets under management. Digital Currency Group is a venture capital firm that invests in various crypto-related projects, such as Gensis Trading, Foundry and CoinDesk.
Silbert has been vocal about his bullish views on Bitcoin and other cryptocurrencies for a long time. He has also been critical of some projects, such as Ripple (XRP), which he considers to be centralized and not a true cryptocurrency. He has also forecasted that most altcoins will go bankrupt in the long term, while Bitcoin will continue to dominate the market.
To conclude, Barry Silbert is a prominent figure in the cryptocurrency industry who suggests that central bank digital currencies are positive for Bitcoin. He contends that CBDCs will create the infrastructure for institutional interest in non-central bank cryptocurrencies like Bitcoin. He also emphasizes 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.