The rise of CBDCs represents a fundamental shift towards a more centralized financial system, directly opposing Bitcoin’s foundational principle of decentralization. CBDCs are inherently centralized, controlled by central banks and subject to their policies. This centralized nature allows for greater control over monetary policy, potentially leading to increased surveillance and censorship. As CBDCs become more prevalent, they could undermine the very existence of decentralized cryptocurrencies like Bitcoin. If users and businesses prioritize the convenience and perceived stability of CBDCs, Bitcoin’s network effect could diminish, leading to a decline in its value and relevance. The threat to decentralization is a serious challenge to BTC, as it undermines one of its key selling points.