A lot of countries are releasing/ contemplating to release their own digital currencies. EU is contemplating digital euro, Jamaica is thinking of digital Jamaican dollar.. India has already launched digital rupee..
How these currencies will affect the bitcoin/crypto ecosystem?
It all depends upon how much trust people retain in traditional financial institutions and how well central banks are able to incentivize the rapid development and adoption of their assets.
Initially, they could incentivize CBDCs offering excellent options and terms to the public. Then later those options could dry up, if they succeeded in achieving a monopoly. Which could in turn spawn more alternative assets and currencies in something resembling a financial arms race. That would appear to be the normalized trend we've witnessed throughout history.
Who do people believe in, and who do they trust? Both are great questions I would not mind knowing the answer to.
On one hand, I think public distrust of the state could be at an all time high due to corona lockdowns and general discontent. On the other hand people can certainly have short term memories at times. It is possible most have already forgotten events of the past 2 years? Its hard to say which direction the wind is blowing, many aren't being as vocal about their thoughts as they have in the past.
I get the impression many do not remember the 2008 financial crisis. Perhaps the COVID crisis will be the same? Or perhaps it will be different?
