Michael Sonnenshein, CEO of Grayscale Investments, the world's largest digital currency asset manager for cryptocurrency investments, said the creation of a digital dollar by the U.S. central bank would provide a tailwind for bitcoin.

In a recent interview with CBNC's "Squawk Box," Sonnenshein claimed that bitcoin and other cryptocurrency assets would benefit from the digital dollar created by the Federal Reserve.

Sonnenshein notes that payment platforms such as PayPal have begun to shift direction by offering customers decentralized protocols in the form of bitcoin and other cryptocurrency assets.

We actually believe that the emergence of digital dollars or federally backed digital assets has created a tailwind for investors. Companies like PayPal and others have included decentralized protocols like Bitcoin and others in their business models.

Sonnenshein's review is a response to a question posed by co-host Andrew Sorkin, who claims that the Federal Reserve-backed digital dollar will put companies like PayPal out of business. Sorkin argues that consumers have no incentive to use PayPal instead of digital dollars, thus reducing the former's profits to zero.

Sonnenshein counters this idea, saying that digital dollars are good for both Bitcoin and PayPal. In addition, PayPal has been a driving force behind bitcoin adoption, launching a digital currency package for users in October 2020.

“We actually think the emergence of digital dollars or federally backed digital assets creates a tailwind for investors,” said @sonnenshein . “Companies like $PYPL and others have included decentralized protocols like #bitcoin and others’ business models.” pic.twitter.com/jZmPUd0GXu

– Squawk Box (@SquawkCNBC) February 2, 2022

Disclaimers

The views and opinions expressed by the author or anyone mentioned herein are for informational purposes only and do not constitute financial, investment or other advice. Investing or trading in cryptocurrency assets entails the risk of financial loss.