CBDC vs bitcoin: Who will win?


For a beginner, the difference between CBDC and bitcoin is relatively minimal. CBDC refers to the Central bank’s digital currencies. These are the currency that has backing from the central government. Undoubtedly, both are digital, and to say which one of these will win, is quite challenging. Still, we will attempt to compare these digital currencies. If you are not yet clear about the basics of CBDC, you can check platforms like  Software to get details about digital currency. 

About CBDC

A CBDC is just like fiat money, but it is digital. Since most transactions through fiat currencies are digital, it can be challenging to know the exact difference between them. CBDC works in such a way that they are offering a getaway to digital currency. But, by paying close attention, you will find that they are just like another flavour of fiat money. In practicality, CBDC only solves some of the problems in traditional currency. Therefore, many experts opine that CBDC is just here to work for the central bank. 

The difference in working of CBDC Vs bitcoin

There also lies the difference in the working of CBDC and Bitcoin. The main point of difference is that CBDC does not share any of the characteristics like trust lessness and decentralization that is the core of bitcoin. Many experts opine that CBDC is just the opposite of bitcoin. CBDC is like a dream come true for the central bank. These are digital currencies just for their sake and lack every characteristic of bitcoin. They are founded as per the liking and policies of the government. The main difference that CBDC has in comparison to bitcoin is that CBDC takes away the essence of privacy and decentralization. 

How is CBDC better than bitcoin?

There is one aspect in which CBDC is better than bitcoin. Bitcoin is relatively high on gas fees and does not offer any value when we transfer it locally or internationally. But, regarding CBDC, It reduces all frictions for international payment. Therefore, it is the best feature of CBDC that is better than bitcoin. 

The hidden intentions of CBDC

Right from the beginning, people opine that CBDC comes up with a hidden intention. The debate between bitcoin and CBDC should be seen in the context of the unbanked population. Governments worldwide are pushing their CBDC agenda by talking about the volatility concerning bitcoin. Investors say that bitcoin is entirely speculative, and CBDC can be the best option in terms of volatility. 

Privacy issues

Privacy is a significant issue when it comes to any digital currency. Many people say that since CBDC falls under the purview of the government, it won’t offer any privacy. When it comes to cryptocurrencies like bitcoin, governments face issues as they feel that they can only run them in a parallel economy with the supervision of the government. As per reports, the government needs to protect the privacy of consumers. Thus, if any government comes up with its CBDC, they need to offer a balance of privacy and security for users. But, as far as the current state of CBDC is concerned, striking a balance between privacy and transparency seems an uphill task. 

An intermediate model

People on the slides of CBDC and bitcoin say that we need a model that can work in favour of the government and citizens. They also need a model of digital currency that can work well with commercial banks and non-banking institutions. 


Regarding the fight between CBDC and bitcoin, privacy is one of the major concerns. People want CBDC to offer strong privacy while also maintaining financial compliance. Therefore, it is vital to inform customers how the stored data will be used. No crypto lover will sacrifice their privacy because they need the government’s backing. Thus, the need of the hour is to develop an offering that can be good for government-backed CBDC and bitcoin. Let’s see how these systems work closely in the same economy, with the same people and users.