Nishchal Shetty supports the integration of central bank digital currencies (CBDC) with public blockchains.

10 February 2024 | 02:22

Nishchal Shetty supports the integration of CBDC with public blockchains

Nishchal Shetty, the founder and CEO of WazirX – a leading Indian cryptocurrency exchange – advocates for the integration of Central Bank Digital Currencies (CBDC) with public blockchains. In his recent statement, Shetty emphasized the potential benefits of this integration, particularly in reducing the risks associated with existing stablecoins.

Shetty believes that CBDC can effectively mitigate the risks associated with existing stablecoins. One of the main arguments is the ability to utilize programmable CBDC on decentralized networks. This will allow users to have direct control over the assets that back stablecoins. As a result, decentralizing these assets will not only enhance security, but also strengthen transparency and trust in the entire ecosystem.

Reducing systemic risk and increasing regulatory oversight

Shetty also highlights the role of integrating CBDC in reducing systemic risk associated with stablecoins in the Web3. Integrating CBDC onto public blockchains would enable end users to control the assets that secure stablecoins, thereby eliminating the risk of losing deposited fiat in the event of a central entity’s failure.

In addition, CBDC integration introduces greater regulatory oversight and accountability as central banks play a crucial role in the issuance and regulation of these digital assets. This regulatory framework provides users with additional confidence in CBDC-based stablecoins, which may promote their adoption and enhance their utility in the digital economy.

Conclusion

The integration of Central Bank Digital Currencies with public blockchains has the potential to not only minimize risks associated with stablecoins but also strengthen security, transparency, and trust in the cryptocurrency ecosystem. It also gives users greater control over their assets and ensures increased regulatory oversight, which can accelerate the adoption and use of CBDC in the digital economy. The introduction of this integration will be another significant step towards the development of cryptocurrencies and blockchain technology.