China’s CBDC to compete with bitcoin
Some experts believe that the digital yuan will become the main rival of bitcoin. Dawn Fitzpatrick, chief investment officer at Soros Fund Management, is among the supporters of this theory.
The coronavirus pandemic has significantly accelerated the pace of bitcoin incorporation in our everyday life. Widespread global concerns over the devaluation of fiat currencies amid various restrictions and related costs changed the attitude of traditional investors to digital assets. They started to treat the world’s flagship cryptocurrency seriously. Consequently, large investment funds officially added bitcoin to their portfolios even though experiments with the cryptocurrency were never publicly revealed.
However, along with its growing popularity, the top digital coin has faced serious problems. Earlier, it had to compete with less popular tokens. Now, it will have to fight against the virtual national currencies of the world's largest economies.
According to Dawn Fitzpatrick, the advent of central bank digital currencies will pose a threat to bitcoin but will not be able to eliminate it completely. "I think [CBDCs] are a real threat, but I think it will be temporary. I don't think they will be successful in permanently destabilising bitcoin," she said.
"One thing when you think about bitcoin is central bank digital currencies are going to be here I think quicker than people expect," Fitzpatrick added. She also mentioned that China would be one of the first countries to present its CBDC.