How would centralisation of a fiat currency will even affect Bitcoin? Im confused. In short term? on what sense? Cryptocurrencies and fiat such as USD has no effect with one another. They are just interchangeable if an investor would like to liquidate an amount of his asset. Even the market prices of cryptos are still based with fiat but a sudden fall on the value of one, won't result to a change with other one's market price.
Exactly. Fiat is Fiat, while Bitcoin is Bitcoin. You can't compare both of them because they're completely different things. Comparing BTC vs Fiat (USD, EUR, YEN, etc) would be comparing apples vs oranges. We all know Fiat will always be centralized, no matter how governments wants us to believe otherwise. The launch of CBDCs will only remove paper money from circulation by putting the mainstream economic system into the digital realm. But that doesn't mean Fiat by itself will become decentralized. On the contrary, CBDCs will enable greater centralization as they will allow governments and central banks to have a full scope over people's finances. Not like paper money where transactions are performed from one person to another without leaving any trace.
When the Digital Dollar comes, we should expect everything else to remain the same. Decentralized cryptocurrencies, on the other hand, will continue to improve and reach a wider audience in the future. They will never go away thanks to the way they were designed. Considering that crypto has come a long way since it's inception, it's likely it will live alongside Fiat for generations. Who knows how a full-fledged cashless society will look like in the long run? Just my opinion
