Most major central banks, including the U.S. Federal Reserve, the Bank of England and the European Central Bank, are studying the potential launch of a digital version of their currencies, dubbed CBDC.
"Is it (CBDC) a threat to Binance or other crypto-currencies? I don’t think so. I very much think that the more we have, the better," Changpeng Zhao told a news conference during Europe's largest tech conference, the Web Summit, in Lisbon.
He said the blockchain technology behind cryptocurrencies should be available for CBDC and adopted by governments.
"It will validate the blockchain concept, so that anybody who still has concerns about the technology, will say: 'OK, our government is using the technology now'," Zhao said.
"So, all those things are good," he said, adding that CBDC would still be different from native crypto as "cryptocurrency is a deflationary asset".
Still, he said, recently cryptocurrency has been highly correlated with the stock market, with both assets correcting sharply as central banks hike interest rates to control record inflation.
"In theory they should be inversely correlated, but today they go the same way, mainly because most of the people who trade on crypto (assets) also trade stocks," he said.
"When the Fed raises interest rates, and the stock market crashes, they want more cash, so they sell crypto. This is because the user base is still very highly correlated," he said.