Ethereum Co-Founder Vitalik Buterin Says Time to Build, Voices Concerns Over CBDCs

In a recent interview with CNBC, Vitalik Buterin, co-founder of Ethereum, spoke about privacy and the future of the Ethereum network. Buterin stated that it was time to get serious and build things people can actually use. He emphasized that this was not always exciting but it was important to get the basics right before moving on to abstract things.

He said, “The stuff that we often find a bit basic and boring is exactly the stuff that brings lots of value to them right now, like making payments work, and savings.”

Day-to-day things like banking are still unavailable to many people in developing countries. Buterin added, “It’s hard to even be interested in really abstract stuff like decentralised social media, when you don’t really have those kinds of basics done.”

Decentralisation is Key

But Buterin believes this must be achieved in a decentralised way. While centralized exchanges, like Binance, make it easier for individuals with limited technical knowledge to access crypto, they are also vulnerable to pressure from external forces and corruption. That’s why Buterin advocates for a better on-chain experience in a decentralised way.

“We need it to actually be possible to do Ethereum payments in a way where the transaction fee is less than five cents a transaction; in a way where the experience doesn’t suck and randomly fail 2.3% of the time; in such a way that you need a Ph.D. in Ethereum sciences to actually figure out what’s going on.”

Vitalik buterin

But he also touched on a topic that is important to many in crypto, privacy and security. Specifically, in Buterin’s view, crypto wallets the way they work now are not ideal. He said, “People need to have wallets that are actually secure, where if they lose the keys, they’re not going to lose everything.”

The role of CBDCs

One potential solution to this issue could be a Central Bank Digital Currency (CBDC), a topic hotly debated at present. While many countries are actively discussing or conducting trials related to CBDCs, the United States, for instance, has just moved closer to banning them. In contrast, Australia’s Reserve Bank (RBA) is currently in research stages of CBDC development, although it is anticipated that a full implementation is still a long way off.

Buterin once hopeful about a national digital currency said, “That was a space 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.”

Replacing the System

But Buterin is no longer a supporter of CBDCs, highlighting that decentralisation is crucial. In his view, a lack of decentralisation would just lead to a new version of the same banking system with added surveillance.

“They end up being even less private and basically break down all of the existing barriers against both corporations and the government at the same time,” Buterin added.

When it comes to Ethereum, Vitalik stated that the primary focus moving forward would be on zero-knowledge rollups (ZK-rollups) to enhance privacy and scale the network. ZK-rollups, as a layer-2 solution, are designed to improve network throughput and reduce fees.