Vitalik Buterin Cautioned CBDCs Going the Wrong Way And Labeling Them Banking “Front Ends”
It has been claimed that Vitalik Buterin, co-creator of the cryptocurrency Ethereum (ETH), feels central bank digital currencies (CBDCs) are not progressing as he had planned.
Buterin, in a recent interview with CNBC, expressed pessimism about CBDCs after changing his mind and now seeing them as “front ends” for the established banking system.
“I was more optimistic about the CBDC industry five years ago, if stupidly so since so many people were working to make CBDCs blockchain-friendly, provide true transparency and verifiability guarantees, and provide at least some degree of actual privacy.
With each project reaching a particular level of completion, they eventually fade away as version 1.0 is neared. When new payment systems are just rebranded interfaces for the same old financial infrastructure, they hardly improve upon the status quo.”
Buterin predicts that CBDCs will not exist as isolated digital assets. Instead, he claims that the adoption of CBDCs would make it easier for the government and companies to track the users’ financial activities.
“They wind up being considerably less private and essentially dismantle all of the present protections against companies and governments.”
With its proof-of-stake consensus mechanism, Ethereum, the dominant smart contract platform, may be better able to withstand government meddling, according to the former millionaire.
“Proof-of-stake systems are more secure and difficult to shut down while remaining anonymous. Using proof-of-work demands a lot of power and a lot of physical equipment. Drug enforcement authorities are experts at recognizing situations like this one since they have been doing it for decades.”