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Vitalik Buterin alarms on CBDC and insufficient decentralisation

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On September 22, in an interview with CNBC,  Ethereum co-founder Vitalik Buterin discussed the development of Ethereum and its new focus on cryptocurrencies in real life. In particular, he highlighted the adoption of digital assets within developing countries. Buterin also expressed concerns regarding central bank digital currencies (CBDC). In this article, we have delved into the key points of his interview.
 

Buterin on future of Ethereum and insufficient decentralisation

Speaking about Ethereum, Buterin believes that the past 10 years have been a time of technical experimentation and realisation of the opportunities that blockchain offers. In the next decade, Ethereum’s focus should be on user experience and on "building things that people use".

Expanding further on this particular subject, Buterin says that best use cases for crypto are demonstrated in developing countries since there is enough space for blockchain technologies. Recently, we have covered the news about an Indian city where land ownership goes digital with NFTs.

At the same time, Buterin points at the problem of insufficient decentralisation. He takes Binance as a good example of this issue. Ethereum’s co-founder says that besides the fact that Binance is popular worldwide, its solutions allow businesses to conveniently accept payment in cryptocurrencies. However, the exchange is still centralised, which poses potential risks of regulatory pressure and corruption. Actually, Binance definitely experiences some pressure.
 

Vitalik Buterin does not welcome CBDC anymore

In a significant part of the interview, Vitalik Buterin discusses Central Bank Digital Currencies (CBDCs). He mentions that a few years ago, he had high expectations of this innovation, believing that a lot of people wanted to do things like make them blockchain friendly, give actual transparency and verifiability guarantees, and some kind of level of actual privacy".

Over time, however, those hopes did not materialise. CBDCs essentially became just a digital extension of actual financial systems with all their pros and cons. In Buterin’s view, "they just basically end up being different front-ends for the existing banking system".
 

🤔 What is CBDC?

A Central Bank Digital Currency (CBDC) is a form of digital currency issued and regulated by a country's central bank. Unlike decentralised cryptocurrencies, CBDCs are fully centralised. They are operating under monetary policies and regulatory control of the government.

The topic of CBDC has attracted more and more attention in recent years. In July, the  preliminary code of digital Brazilian Real was published, which turned out to have control mechanisms. In the US, the CBDC issue is on the agenda in the upcoming presidential elections; crypto enthusiasts candidates are against this type of digital money.
 

You might also like: 

What’s up with Binance: is it really going to collapse?

Land ownership goes digital with NFTs

Digital Real’s smart contract

Сrypto enthusiasts’ battle for the US presidency

Maria Kachura
Maria Kachura

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