More than 130 countries have developed CBDCs, raising concerns about the future impact of cryptocurrencies.
Experts say that while CBDCs could threaten decentralization, they could encourage broader adoption of digital assets.
Increasing CBDC competition signals a global shift to regulated digital finance.
More than 130 countries, covering almost 98% of the world’s GDP, are currently developing or testing central bank digital currencies (CBDCs).
What started as a small pilot has turned into a full-fledged race to digitize money. As the launch of CBDC approaches, one big question hangs over the crypto market. Will CBDC replace cryptocurrencies or can both coexist?
Global transition to digital money
The push for CBDC is driven by three goals: faster payments, financial inclusion, and control of digital money. Countries such as China (e-CNY), the eurozone (digital euro), Nigeria (e-naira) and the Bahamas (sand dollar) are already leading the way.
The period from 2025 to 2028 could be a major turning point when CBDC pilot operations turn into full-scale deployment. The Atlantic Council’s CBDC tracker currently lists a record 49 active pilots, demonstrating how quickly the government is moving towards a national digital currency.
CBDC and virtual currencies: two sides of the same coin?
Although CBDCs and cryptocurrencies may seem similar, they are built on completely different ideas.
CBDCs are centralized, state-backed, and designed with stability in mind. Cryptocurrencies, on the other hand, are decentralized, permissionless, and built on the idea of economic freedom.
Still, some experts think there’s a way for both to exist. rev bit They point out that CBDCs could actually help cryptocurrencies by getting people used to digital wallets and blockchain payments. Once people start using digital currencies issued by central banks, they may then become more open to exploring Bitcoin and DeFi.
Also read: Is CBDC now ‘irrelevant’? Ripple CTO says market has moved
Concerns: Management, Privacy, Regulation
That being said, many in the crypto industry are not convinced. While clearer rules could provide legitimacy, CBDCs could also prompt regulators to tighten KYC and AML checks, increasing controls at the expense of privacy.
The Bank for International Settlements (BIS) found in a 2025 paper that: “More positive central bank CBDC sentiment is associated with a negative impact on crypto market returns.”
Community sentiment also reflects that concern. A Reddit discussion in November showed that most users viewed CBDCs negatively, primarily due to privacy concerns and concerns about state surveillance.
As one user said, “We don’t really want a CBDC…A CBDC is the opposite of a cryptocurrency.”
Still, some believe that both can coexist: CBDC for everyday payments, and cryptocurrencies for investment and independence.
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Banks may also feel the heat
Cryptocurrencies are not the only ones that may face disruption. A report titled “CBDC and Banks: Fast and Slow Disintermediation” Retail CBDCs could take deposits away from banks, warning that they could be forced to rethink how they lend and operate.
midway point
Despite all the tensions, some researchers believe that coexistence is the only real outcome. Some studies claim that CBDCs have the potential to handle regulated digital cash, while cryptocurrencies continue to play a role in privacy and international remittances.
So, are CBDCs good or bad for cryptocurrencies? Probably both. Not only will it tighten regulation, increase competition and change the way money moves, but it will also drive more people into digital finance.
The real question is no longer whether a CBDC is coming, but whether cryptocurrencies can evolve fast enough to maintain a presence in a world where every government wants a piece of blockchain.