Many things have morphed beyond the realm of what we originally designed them to do, such as the internet. When Satoshi Nakamoto first invented Bitcoin (CRYPTO:BTC) in 2008, they envisioned it as a peer-to-peer electronic cash payment system free from the grasp of central banks and governments. Today, those two entities are encroaching on that idealistic dream with a strategy of “if you can’t beat them, join them!”
The threat of central bank digital currencies (CBDCs) replacing decentralized cryptocurrencies is a real one, and investors are already seeing the signs. For example, the U.S. Federal Reserve is moving forward in developing its own cryptocurrency with a research paper coming out this summer. What’s more, China’s central bank is already on the verge of launching the digital renminbi (eYuan). So just what does this mean for the future of decentralized crypto?
The empire strikes back
It’s difficult to see all of the implications at first glance, but CBDCs have the potential to revolutionize our economy, for better or for worse. Let’s say the Federal Reserve goes ahead and launches a digital U.S. dollar (eUSD) cryptocurrency.