It remains unclear whether CBDCs will benefit the US economy, the Federal Reserve (Fed) said.
The United States Federal Reserve has released a discussion document examining the pros and cons of issuing a potential US CBDC. This was the Fed’s first public discussion to determine how a digital version of the dollar could benefit the domestic financial system.
While many countries, most notably China, are racing to issue digital central bank states and deploy them in their own currency networks, the United States is in no rush. More than a year ago, Fed Chair Jerome Powell pledged that the world’s leading economy would “carefully and thoughtfully review the matter” before deciding whether to issue a CBDC.
“We look forward to engaging with the public, elected officials, and a variety of stakeholders as we explore the pros and cons of a CBDC in the United States.”
The agency noted that consumers and businesses have long held and transferred money in digital forms, including bank accounts or online transactions. Thus, a potential central bank digital currency could continue the trend and offer “a secure, digital payment option for households and businesses.” Additionally, CBDC transactions may offer the opportunity for faster payment processing between countries.
However, the digital version of the US dollar may violate people’s privacy as the government will control the currency product. It may also not be conducive to US financial stability and does not encourage existing means of payment.
Last year, Powell argued that the main benefit of CBDCs could be replacing cryptocurrencies, including stablecoins. However, earlier this month he changed his mind, stating that central bank digital currencies and stablecoins can coexist.
In April 2021, the Federal Reserve Chairman ruled that the US should not copy and paste China’s central bank digital currency model. According to him, the two economic superpowers are very different and require separate approaches:
“The currency used in China is not the currency that will work in the United States. It really allows the government to see every payment they use in real time.”
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Discover why Qubetics, Fantom, and Immutable X are the best cryptos to buy in November…
Sui Foundation partners with Franklin Templeton Digital Assets to enhance DeFi solutions on the blockchain.
See how Bitcoin confronts $99K resistance, Avalanche enjoys a 23% rise, & BDAG achieves a…
Gros Islet, St. Lucia, 22nd November 2024, Chainwire
Nov 18th, Panama - Gate.io, a global leader in digital asset trading, has officially unveiled…
The Bitdeer convertible notes offer a 42.5% conversion premium, allowing conversion into cash with the…
This website uses cookies.