Vitalik says CBDC development is not happening in a healthy direction

The Ethereum co-founder raised alarm against the Central Bank Digital Currency (CBDCs) development race and claimed that it is not going through that way of development as we expected earlier.

The Central Bank Digital Currency (CBDCs) is the concept of a centralized form of sovereign fiat currency. In the present time, more than 100 countries are in the race to develop CBDC in different ways and nearly 20 Central Banks already developed & testing it in collaboration with the banks.

Recently the Ethereum co-founder Vitalik Buterin appeared in an interview with CNBC and he talked about the CBDC development race and said that CBDC development is not going through the way he had hoped for.

Vitalik said that he was highly optimistic about the CBDC concept but now he is disappointed that the central banks are focused on the front end of this technology to bring enhancement to traditional banking services.

“(The CBDC) space is where I think I had somewhat more hope, probably naively, five years ago, because there were a lot of people who wanted to do things like make them blockchain-friendly, give actual transparency and verifiability guarantees, and some kind of level of actual privacy,” Vitalik added.

Furthermore, Vitalik said that the majority of the CBDC systems are not much better, even if they are worse than the existing traditional banking system.

Vitalik believes CBDC won’t be a private form of money but the majority of the government agencies are happy that they will be able to trace the money transactions against the citizens. In short, they will monitor the financial transactions against the Financial Privacy Act. 

On Ethereum’s future, Vitalik said that the Ethereum blockchain network now has a better ability to stand in the world with better support from the governments, as it is now running on the Proof-of-stake (PoS) consensus which consumes very little amount of electricity over Proof-of-work (PoW) consensus. 

According to Vitalik, it is easy to achieve privacy & harder to shut down the network because of PoS consensus. 

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