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Barry Silbert Explains Why Central Bank Digital Currencies Boost Bitcoin

On Feb. 12, Barry Silbert, the founder and CEO of Digital Currency Group (DCG) and Grayscale Investments, spoke about his positive perspective on Bitcoin in a Grayscale investor call. He addressed various matters related to digital assets, such as how Bitcoin influences the movement of wealth among generations, decentralized finance, central bank digital currencies (CBDCs) and stablecoins.

A federal regulator issues and controls CBDCs, which are digital currencies. 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. At least 10% of central banks are anticipated to issue a CBDC for the general public soon, while China is reportedly about to test its CBDC.

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 expressed confidence that central banks will require users to use and engage with the existing financial systems and will not limit the supply of the digital currency. “Central banks love to print money,” Silbert noted, pointing out 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. Grayscale Investments is the world’s largest digital asset manager, with over $40 billion in assets under management as of Feb. 12. Various crypto-related projects, such as Foundry, Genesis Trading and CoinDesk, are invested in by Digital Currency Group, which is a venture capital firm.

Silbert has been vocal about his bullish views on Bitcoin and other cryptocurrencies for a long time. Some projects, such as Ripple (XRP), which he regards as centralized and not genuine cryptocurrencies, have also been criticized by him. He has also predicted that most altcoins will experience bankruptcy in the long run, while Bitcoin will continue to dominate the market.

In conclusion, Barry Silbert is a prominent figure in the cryptocurrency industry who believes that central bank digital currencies are good for Bitcoin. He contends that CBDCs will create the infrastructure for institutional interest in non-central bank cryptocurrencies like Bitcoin. He also points out 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.