The Bitcoin critic has suggested that centrally issued digital currencies may be more trustworthy and end up destroying decentralized coins.
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Nouriel Roubini, who often spells doom for Bitcoin (BTC), has returned with new commentary, this time suggesting that central banks may end up destroying digital coins by creating Central Bank Digital Currencies (CBDCs).
Roubini predicts a completely cashless society and fintech solutions that allow some forms of payment to communicate directly with the central bank.
“By allowing any individual to make transactions through the central bank, CBDCs would upend this arrangement, alleviating the need for cash, traditional bank accounts, and even digital payment services,” he explained.
Roubini also criticized the current state of distributed ledgers, which depend on computing done by dedicated individuals or organizations. Instead, central banks would use a centralized form of computing.
But some see the distributed network as an added layer of security as there is no single entity controlling the ledger, especially in the case of proof-of-work coins.
Roubini admits that having a central bank distribute digital assets directly to the economy, without commercial banks, would be deeply disruptive. Commercial banks would have to stop their fractional reserve lending, and a central bank would apply its monetary policy directly. But so far, no central bank has chosen the route of direct participation through fintech.
“In due time, CBDC-based narrow banking and loanable-funds intermediaries could ensure a better and more stable financial system. If the alternatives are a crisis-prone fractional-reserve system and a crypto-dystopia, then we should remain open to the idea,” Roubini suggested.
He also added that transaction speed would be key to a new type of finance transfers, pointing to one of the strengths of digital currencies. Even without scalability, most existing coins currently achieve better transaction times compared to commercial banks.
Roubini’s comments arrive at a time when the price of BTC is at a crossroads again, sinking under the $3,800 mark with expectations of more corrections. BTC slid to $3,799.26 as of 5:45 UTC on Thursday.
SOURCE (https://cryptovest.com/news/c-banks-will-wipe-out-bitcoin-btc-with-own-cryptocurrencies-nouriel-roubini-predicts/)