Most central banks and financial authorities openly considered cryptocurrencies bad and even termed it as a threat to traditional finance. However, there are several people among those critics of crypto assets who treat them as cutting edge tech. For instance, the Central Bank of Brazil’s director – Fabio Araujo – recently praised the top cryptocurrency, bitcoin (BTC).
Central Bank Director Terms Bitcoin a Financial Innovation
As per the reports, Araujo stated Bitcoin as a financial innovation in itself given its technological properties. The crypto asset is capable of producing and acting as a much needed support for many new and critical financial products. The Central Bank director cited the example of Web 3 and the role of bitcoin’s tech in the concept.
Araujo pointed out that given the role of top cryptocurrency in the emerging concept of decentralized internet or termed as Web 3, it acted as a crucial point. This has ended up triggering a lot of different authorities and governments around the world to look for development and research regarding central banks digital currencies (CBDC).
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Intriguing Features Of Top Cryptocurrency
While talking about the Bitcoin’ features, Araujo disclosed the optimistic perception of banks towards the crypto asset and shared the reason for it. He confessed that the Central Bank of Brazil started looking into bitcoin and its properties for more than a decade, in 2009.
Central bank director said that the launch of bitcoin and introduction of distributed database technology that could play a crucial role in Web 3 development, motivated the bank to look into it. While explaining the achievements of bitcoin, he added that the major cryptocurrency brought the solution of proof-of-work with its practical use case. PoW plays a crucial role in terms of serving primary facilities in bringing Web 3 to the general people, he added.
Araujo showcased several concerns and hurdles in the way of Bitcoin becoming a mainstream crypto method. He outlined the volatility of crypto asset acts as its major drawback. However, he added that CBDC could act as a potential solution for this problem. He agrees that the central bank’s digital currencies have potential to work as a mainstream payment solution while eliminating the volatility factor.
Source: https://www.thecoinrepublic.com/2022/08/08/brazilian-central-bank-head-considers-bitcoin-as-an-innovation-in-finance/