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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 discussed various topics related to digital assets, such as Bitcoin’s role in the generational shift of wealth, stablecoins, decentralized finance and central bank digital currencies (CBDCs).

CBDCs are virtual currencies that are issued and controlled by a federal regulator. Unlike Bitcoin and other cryptocurrencies, CBDCs are fiat money in the digital form. So far, no global jurisdiction has launched a CBDC, but many governments have been exploring and developing such projects. At least 10% of central banks are anticipated to issue a CBDC for the general public soon, while China is reportedly about to test its CBDC.

Silbert said that central banks that create their own digital currencies could be empowering Bitcoin by building the infrastructure for institutional interest. He claims to have purchased his first Bitcoin in 2012, three years after the first block on the Bitcoin blockchain was created. He believes that Bitcoin and other non-central bank cryptocurrencies could benefit from the same infrastructure that is used by the widespread adoption of CBDCs: He said: “In the future we may have 80 different CBDCs. And if that occurs, it would spark a huge amount of investment in operators of financial systems where basically every financial institution would then need to be able to securely store and transact CBDCs and, you know what, if they actually construct that infrastructure, that same infrastructure could be utilized for non-central bank digital currencies like Bitcoin.” He also said that he was confident that central banks will not cap the supply of the digital currency and will require users to engage and use the existing financial systems. Silbert pointed out Bitcoin’s limited supply feature, saying: “Central banks love to print money.”

Silbert is one of the most influential figures in the cryptocurrency industry, as he leads two major companies that are involved in various aspects of digital assets. 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 Gensis Trading, Foundry and CoinDesk.

Silbert has long been vocal about his bullish views on Bitcoin and other cryptocurrencies. 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 sum up, Barry Silbert is a prominent figure in the cryptocurrency industry who thinks that central bank digital currencies are beneficial for Bitcoin. He maintains that CBDCs will create the infrastructure for institutional interest in non-central bank cryptocurrencies like Bitcoin. He also emphasizes 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.