Lugano's Deputy CFO Foresees Coexistence of Bitcoin, Stablecoins and CBDCs
Summary:
Deputy CFO of Lugano, Paolo Bortolin, predicts a future where Bitcoin, stablecoins and central bank digital currencies coexist. CBDCs, centralized by their definition, serve differently from decentralized Bitcoin. Wholesale CBDCs cater to transactions among institutions, whereas retail CBDCs operate as the standard digital form of currency for everyday transactions. If retail CBDCs enable individuals to manage all their finance easily, traditional banks might face competition. Meanwhile, stablecoins like Tether (USDT) could play an essential role until retail CBDCs are broadly accepted. Switzerland is progressing with its wholesale CBDC project, Helvetia III, with discussions to further this approach underway. Lugano now allows Bitcoin and USDT for tax payments and boasts 400 BTC and USDT-accepting merchants plus 14,000 users.
A local finance officer from Lugano in Switzerland, Paolo Bortolin, believes that the coexistence of Bitcoin (BTC), stablecoins and central bank digital currencies (CBDC) is highly probable. He affirms that all forms of digital currencies and assets can work simultaneously, as Bitcoin with its unique decentralised nature, stablecoins and CBDCs can cater to diverse needs of the users.
Bortolin, who serves as the deputy chief financial officer for Lugano, conveyed to Cointelegraph that CBDCs are dictated by their centralised nature and purpose, resulting in them functioning distinctly from Bitcoin. He explains that while wholesale CBDCs facilitate transactions within the financial sector among institutions, retail CBDCs operate as the standard digital form of currency for daily payments or transactions between individuals, akin to the conventional Swiss franc.
Despite Bitcoin and CBDCs not conflicting directly, he acknowledges that certain forms of government-issued money may potentially clash. While the imminent arrival of wholesale CBDCs is expected, the future prospect of retail CBDCs seems murky, particularly due to privacy concerns associated with the latter.
Moreover, retail CBDCs could effectively pose a threat to traditional banks, Bortolin remarked. This can be attributed to the fact that if people were given the ability to handle all their Swiss francs through a digital wallet overseen by the central bank, coupled with the ability to manage decentralised finance investments effortlessly through a CBDC, the need for conventional banking systems might be undermined.
However, Bortolin anticipates that at least until widespread adoption of retail CBDCs occurs, stablecoins like Tether (USDT) will likely prime an integral part of the digitised finance ecosystem. He predicts that these privately issued stablecoins could vie for supremacy, and one might assume the leading role for a specific currency, akin to the current scenario with Tether holding strong for the USD.
Bortolin also shed light on Switzerland’s advancements with its wholesale CBDC venture, Helvetia III, asserting that although his institution hasn't actively participated in this project, talks are in progress to implement this approach in the forthcoming months. He confirmed that, in the event of the Swiss National Bank issuing a CBDC, his institution would certainly integrate its use.
Towards the end of 2023, Lugano expanded its scope of accepted crypto payments, permitting payment of Bitcoin and USDT for taxes and other community fees. Lugano also accepts LVGA, a local blockchain-based stablecoin explicitly designed for city payments. With the launch of Lugano's Plan B initiative in collaboration with Tether, the city has accumulated 400 BTC and USDT-accepting merchants and 14,000 users.
Published At
1/31/2024 3:06:36 PM
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