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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 covered different issues related to digital assets, such as the role of Bitcoin in the transfer of wealth across generations, decentralized finance, stablecoins and central bank digital currencies (CBDCs).

CBDCs are digital currencies that a federal regulator controls and issues. CBDCs are different from cryptocurrencies like Bitcoin because they represent digital forms of fiat money. Many governments have been developing and exploring such projects, but no global jurisdiction has launched a CBDC yet. While China is reportedly getting ready to test its CBDC soon, at least 10% of central banks are expected to issue a CBDC for the general public in the near future.

He claims to have acquired his first Bitcoin in 2012, three years after the creation of the first block on the Bitcoin blockchain. Silbert stated that by developing the infrastructure for institutional interest, central banks that make their own digital currencies might be strengthening Bitcoin. He suggests that Bitcoin and other non-central bank cryptocurrencies could gain from the same infrastructure that is used by the widespread adoption of CBDCs: 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.

As he leads two major companies that are involved in various aspects of digital assets, Silbert is one of the most influential figures in the crypto industry. As of Feb. 12, Grayscale Investments is the world’s largest digital asset manager, with more than $40 billion in assets under management. Digital Currency Group is a venture capital firm that invests in various crypto-related projects, such as CoinDesk, Foundry and Genesis Trading.

Silbert has been vocal about his bullish views on Bitcoin and other cryptocurrencies for a long time. He has also been critical of some projects, such as Ripple (XRP), which he thinks are centralized and not real cryptocurrencies. He has also projected that most altcoins will go bankrupt in the long run, while Bitcoin will continue to dominate the market.

To conclude, Barry Silbert is a prominent figure in the cryptocurrency industry who suggests that central bank digital currencies are positive for Bitcoin. He argues 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.