Ethereum Co-Creator Buterin Sounds Alarm on CBDCs: Are They Betraying Blockchain’s Promise?

• Ethereum co-founder Vitalik Buterin expresses disappointment with progress in CBDCs while also citing privacy issues.
• Buterin notes that Ethereum, with its shift to a proof-of-stake consensus mechanism, could be more resistant to government interference compared to CBDCs.

Ethereum co-founder Vitalik Buterin has recently shared his views on the developments around central bank digital currencies (CBDCs) adding that he isn’t impressed by the way things are proceeding.

During a recent CNBC interview last week, Buterin shared that his initial optimism towards Central Bank Digital Currencies (CBDCs) has waned. He now perceives them primarily as interfaces for the conventional banking system. The Ethereum co-founder said:

“[The CBDC] space is where I think I had somewhat more hope, probably naively, five years ago, because there were a lot of people who wanted to do things like make them blockchain-friendly, give actual transparency and verifiability guarantees, and some kind of level of actual privacy…

As each and every one of those projects come to a certain maturity, [they]all sort of fall away as the thing comes closer and closer to being a 1.0. We get systems that are not actually much better than existing payment systems because they just basically end up being different front-ends for the existing banking system.”

Vitalik Buterin – CBDCs Won’t Provide Enough User Privacy

Buterin suggests that CBDCs are unlikely to offer the privacy found in traditional digital assets. Instead, he anticipates that CBDCs will enable both government and corporate entities to monitor users’ financial transactions closely. In his words, “They end up being even less private and essentially dismantle existing barriers against both corporations and the government simultaneously.”

The Ethereum co-founder further asserts that Ethereum may be better equipped to resist government interference, especially with its transition to a proof-of-stake consensus mechanism. He explains that proof-of-stake is inherently more conducive to anonymity and more resilient against shutdown attempts compared to proof-of-work. Proof-of-work demands substantial physical infrastructure and energy consumption, which law enforcement agencies have extensive experience detecting.

Vitalik Buterin’s comments came just at a time when the bill to limit the Fed’s U.S. CDBC plans got a thumbs up from the House Committee.

Vitalik Buterin Moves Massive ETH to Coinbase

As per the on-chain data, Vitalik Buterin has transferred a massive amount of ETH to the crypto exchange Coinbase. On-chain data from LoononChain stated that Buterin deposited a total of 400 ETH worth $632,000 to Coinbase.

This development follows another significant transfer made by Buterin just last month. Buterin had deposited 600 ETH, approximately valued at $1 million, into Coinbase. The recent transfer has garnered a varied response within the cryptocurrency community, with numerous enthusiasts making light-hearted remarks while also speculating about the potential motivations behind this substantial transaction.

The Ethereum (ETH) price has come under selling pressure recently dropping under the $,1600 level last week.