The rapid development and pilot programs of central bank digital currencies (CBDCs) in over 130 countries signal that sovereign digital money could become a widely accepted form of payment and settlement, which might reduce the perceived need for decentralized alternatives like Bitcoin in everyday financial infrastructure. As CBDCs gain traction, some economic actors may prefer using state-backed digital currencies for regulatory clarity and ease of integration with existing banking systems, exerting competitive pressure on Bitcoin’s use case as a medium of exchange.
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One perspective is that CBDCs increase competitive pressure on Bitcoin at the narrative level rather than the technical level. Governments issuing digital currencies normalize the idea of digital money, which can reduce Bitcoin’s novelty as “the future of money.” However, this same normalization may also educate the public and indirectly legitimize Bitcoin, even as CBDCs compete for attention in payments and everyday use.
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The oracle sector is becoming more competitive. Chainlink remains the backbone of DeFi data infrastructure, but new players are solving different problems. Pyth focuses on real-time price discovery, RedStone on efficient data delivery, and API3 on governance and decentralization. These alternatives don’t replace Chainlink, but they reduce its exclusivity. Dominance is turning into coexistence.
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