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 covered different issues related to digital assets, such as the role of Bitcoin in the transfer of wealth across generations, decentralized finance, stablecoins 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. So far, no global jurisdiction has launched a CBDC, but many governments have been exploring and developing such projects. China is reportedly preparing to test its CBDC soon, while at least 10% of central banks are likely to issue a CBDC for the general public in the short term.
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 believes that Bitcoin and other non-central bank cryptocurrencies could benefit from the same infrastructure that is used by the widespread adoption of CBDCs: “So at one point of the future we might have 80 different CBDCs. And if that happens, it would trigger a tremendous amount of investment in operators of financial systems where essentially every financial institution would then have to be able to safely store and transact CBDCs and, guess what, if they actually build that infrastructure, that same infrastructure could be used 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, as he leads two major companies that are involved in various aspects of digital assets. With over $40 billion in assets under management as of Feb. 12, Grayscale Investments is the world’s largest digital asset manager. Digital Currency Group is a venture capital firm that invests in various crypto-related projects, such as CoinDesk, Foundry and Genesis Trading.
For a long time, Silbert has been vocal about his bullish views on BTC and other cryptocurrencies. 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 predicted that most altcoins will experience bankruptcy in the long run, while Bitcoin will continue to dominate the market.
To sum up, Barry Silbert is a prominent figure in the cryptocurrency industry who thinks that central bank digital currencies are beneficial for Bitcoin. He contends that CBDCs will create the infrastructure for institutional interest in non-central bank cryptocurrencies like Bitcoin. He also highlights 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.