Grayscale CEO Explains How Launch of a Digital Dollar by the Fed Could Help Bitcoin

Michael Sonnenshein, the CEO of crypto investment firm Grayscale Investments, the world’s largest digital currency asset manager, says that the creation of a digital dollar by America’s central bank would provide tailwinds for Bitcoin. 

Speaking in a recent interview with CBNC’s “Squawk Box”, Sonnenshein claimed that Bitcoin and other cryptoassets would benefit from the Federal Reserve creating a digital dollar. 

Sonnenshein noted that payment platforms, such as PayPal, have begun shifting gears to offer customers decentralized protocols in the form of Bitcoin and other cryptoassets: 

The emergence of a digital dollar or a federal backed digital asset we actually believe creates a tailwind for investors. Companies like PayPal and others are already including decentralized protocols like Bitcoin and others in their business model. 

Sonnenshein’s comments came in response to a question posed by co-host Andrew Sorkin, who claimed a Fed-backed digital dollar would push companies like PayPal out of business. Sorkin argued that consumers would have no incentive to use PayPal over the digital dollar, reducing the former’s margins to zero. 

Sonnenshein pushed back on the idea, saying that a digital dollar would be good for both Bitcoin and PayPal. In addition, PayPal has been a driving force for Bitcoin adoption, launching crypto wallets for users in October 2020. 

Disclaimer

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

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