The CFO of Lugano thinks that Bitcoin, CBDCs, and stablecoins may all live side by side since they all have distinct uses for people.
A local financial authority in Lugano, Switzerland, has said that it is “quite possible” for Bitcoin, stablecoins, and CBDC to coexist in the future.
The city of Lugano’s deputy chief financial officer (CFO), Paolo Bortolin, is hopeful about the future of using various digital currencies and assets together. The reason for this is because, in the official’s opinion, Bitcoin, CBDCs, and stablecoins all have the ability to fulfill distinct customer needs.
At all times, Bitcoin is present and runs autonomously in a completely decentralized fashion, Bortolin assured Cointelegraph in an interview.
On the other hand, CBDCs serve an entirely different purpose and are defined and named in a manner that makes them essential. As with the old Swiss franc, wholesale CBDCs are utilized for transactions between financial institutions, while retail CBDCs are regarded as the typical digital currency for daily payments or peer-to-peer transactions.
Although there is no direct contradiction between Bitcoin and CBDCs, there may be conflicts with other forms of state-issued currency.
“The future of retail CBDCs is uncertain,” Bortolin said, bringing up issues like privacy that are exclusive to retail CBDCs. He added that wholesale CBDCs are expected to emerge soon. The official also said that conventional banks face competition from retail CBDCs. According to him:
“Traditional banks may become less necessary if people are able to store and manage all of their Swiss francs in a central bank-controlled digital wallet and can easily manage their investments in decentralized finance through a CBDC.”
Bortolin continued by stating that, until retail CBDCs gain traction, stablecoins like Tether will likely play a significant role in the digital financial ecosystem.
Bortolin said that “these stablecoins, issued by private entities, could compete for dominance,” comparing it to how Tether is now leading the USD market.
Helvetia III, Switzerland’s wholesale CBDC project, has advanced, Bortolin said. Discussions are now ongoing to move forward with this strategy in the next few months, Bortolin said, adding, “Although we haven’t been involved in this new project, only two bonds have been released under this system so far.”
Also Read: Chinese anti-money-laundering rules will be updated by 2025
