Ethereum co-founder Vitalik Buterin questioned the possibility of cryptocurrencies taking over the global financial system.
According to Buterin’s expectations, traditional and government-backed currencies will retain their dominant role, despite the fact that the crypto sector has shown significant growth and adoption in recent years.
While proponents of cryptocurrencies promote the idea of replacing traditional financial products with digital assets, regulation is a major stumbling block.
The need to tame the crypto sector intensified just the other day after the collapse of the Terra ecosystem (LUNA). The de facto token meltdown wiped out millions of dollars in investments, prompting a number of governments, including South Korea, to enact strict laws to clean up the sector.
One way in which governments are trying to curb the spread of cryptocurrencies is through the introduction of Central Bank Digital Currencies (CBDC). Notably, several countries are already completing studies to develop CBDCs.
And in this sense, Buterin’s comments coincide with the position of the Reserve Bank of India (RBI) that the appearance of CBDC will put an end to private cryptocurrencies.
Market analysts believe that decentralization of some cryptocurrencies is perceived by authorities in different countries as a risk factor for losing full control over money.