Binance CEO Changpeng Zhao Welcomes Government and Central Bank's Plan to Issue Digital Money

Binance CEO Changpeng Zhao. (photo: twitter @cz_binance)

JAKARTA - The plan by the central bank to launch a digital currency is not a threat to other cryptocurrencies. Because they will validate blockchain technology and build trust among skeptics.

According to the CEO of the world's largest crypto exchange, Binance, on Wednesday, November 2, most of the major central banks, including the US Federal Reserve, Bank of England and European Central Bank, are studying the potential launch of a digital version of their currency, called CBDC.

"Is (CBDC) a threat to Binance or other cryptocurrencies? I don't think so. I really think that the more we have, the better," Binance CEO Changpeng Zhao told a news conference, quoted by Reuters at Europe's largest, the Web Summit, in Lisbon.

He said the blockchain technology behind cryptocurrencies should be available to CBDCs and adopted by the government.

"This will validate the blockchain concept, so that anyone who still has concerns about the technology, will say: 'OK, our government is using technology now'," Zhao said.

"So that's all good," he said. He also added that CBDCs would still be different from native cryptos because "cryptocurrencies are deflationary assets".

However, recently cryptocurrencies have been highly correlated with the stock market, with both assets correcting sharply as central banks raised interest rates to rein in record inflation.

“In theory they should be inversely correlated, but today they run the same way, especially since most people who trade in crypto (assets) also trade stocks,” he said.

“When the Fed raises interest rates, and the stock market falls, they want more money, so they sell crypto. This is because the user base is still highly correlated,” he said.