Is CBDC a Bitcoin killer?

CBDC is Central Bank Digital Currency. There is a number of crypto investors who believe in bitcoin and number of investors who believe bitcoin is just a fluff theory. So this blog will be a war of narrative between CBDC and Bitcoin.

What is CBDC?

CBDC or Central Bank Digital Currency is a virtual form of a country’s fiat currency. Fiat currency is a country’s own currency like INR for India, USD for the USA, SGD for Singapore. It is controlled by the government of that country. So CBDC has a monitory authority. In India’s case, it’s RBI. So right now, we have fiat money. Now the government is trying to create a digital variant of that money, and that becomes CDBC.

So suppose you have one lac rupees. Twenty thousand you have in cash and remain eighty thousand in your bank account. As the eighty thousand is not like cash in hand in your case, it’s basically in a node of a computer. And you can easily access it by using any payment app. So now RBI is saying that India has a lot of fiat currency, and that’s why RBI is launching CBDC and not just RBI; all other countries are also launching their fiat currency.

Why has CBDC has been launch not by just India but also by other countries in the world?

Sweden is going to launch their own CBDC, which is called e krona, and they are doing this because a lot of their young population are using virtual payment, not cash. So to make the procedure smoother, they are launching CBDC. 

Let’s now consider Us. In Us interestingly doesn’t have a strong digital currency system like India. In India, we pay approximately nothing for digital payment other than NEFT, RTGS, or IMPS. Like if you pay via Goole Pay, then you pay approximately zero charges for that. In Us, it’s not like that. They pay more transaction charges for digital payment. So Us is launching CBDC to reduce the transaction charges. 

For India’s case, RBI said to penetrate more Indians into digital payment, India is launching its own CBDC by the fiscal year of 2022-2023, which starts from 1st April this year. And along with that Reserve Bank Of India already imposed a 30% tax on any other cryptocurrency, which will be applied at the same time of the fiscal year of 2022-2023.

Ultimately who will win between BITCOIN and CBDC and WHY?

Let’s go point by point. We all know the internet is a network. So to make this network more attractive and useful, we need more and more software engineers who will develop more and more software on a network called the internet for people which will make the life of people easier and in exchange for that engineers will also earn handsome money. So it’s a win-win situation for both creators and users.

So when the government says that the government is making CBDC, then they essentially try to build a network. So this network will only and only be good if developers come to develop software and users come to use that software and find that useful.

Like Bitcoin, Ethereum, Solana, all are separate networks. A lot of applications run on that networks. Like DAO, NFT marketplace, Metaverse. Developers are finding it extremely useful, and they are developing software on these networks. That’s why companies like Facebook, Microsoft, Nike are all coming to this market. On the other hand, if the government launch CBDC without a proper use case, then neither developer will come, nor will it grow. 

On the blockchain narrative, there is a concept called centralization and decentralization. People prefer to see, or developers prefer to develop, a decentralization network. Facebook CEO Mark Zuckerberg launched a cryptocurrency called Libra. Despite having the world’s most used application like Facebook and Instagram, Mark Zuckerberg miserably failed on Libra because it was a centralized project, and eventually, he stopped that.

Similarly, the government is trying to build a centralized network like Mark Zuckerberg. Despite having so much money and power, Mark Zuckerberg could not sustain a centralized network, so it’s a question of how the government will sustain CBDC. But yes, if every country develops its own CBDC, then it will help all to make from one country to another country transactions very easily. 


In the present scenario, if the government doesn’t ban cryptocurrency, then CBDC has no such utility. It will end up duplicating a lot of things which is already present in the market.

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