Cryptocurrency News

US should win CBDC race to maintain dollar’s global reserve currency position: Federal Reserve Governor

The Fed governor has argued that the United States should be at the forefront of developing a central bank-issued digital currency, or CBDC, to strengthen the role of the US dollar. Global reserve currency.

In the May 24 announcement, Federal Reserve Governor Lyle Brainard insisted that Major CBDC Projects Can have a “significant impact” on the global financial system, urging the US to ensure it plays a leading role in the CBDC ecosystem:

“Given the prominence of CBDC in cross-border payments and the reserve currency role of the dollar, it is important for the United States to be on the table in developing cross-border standards.”

The announcement states that the Fed is “focusing its attention” on four key areas of CBDC’s growth – “the increasing role of digital private funds, migration to digital payments, plans to use foreign CBDCs in cross-border payments, and Concerns about financial boycott. “

The governor offered some potential benefits to launch the CBDC, stating that the Kovid-19 epidemic had “accelerated migration to digital payments” to American homes, and noted that prepaid debit cards as a relief It took “weeks” to deliver. Households that did not have up-to-date bank information recorded with the Internal Revenue Service.

“We should explore and try to estimate the extent to which the needs and preferences of households and businesses can move towards digital payments over time,” she said.

Brenard also emphasized the potential risks associated with widespread adoption of private fixed stocks, suggesting that the CBDC could provide utilities and benefits associated with existing USD stable tokens without undermining the government’s control over monetary policy.

“Unlike the fiat currencies of the central bank, the fixed currency does not have a legal tender status[,] There is a risk that the widespread use of private funds for consumer payments may fragment parts of the American payment system in ways that impose burdens and increase costs for homes and businesses, ”she said.

“In any assessment of CBDC, it is important to be clear about what benefits CBDC will provide in addition to current and emerging payment options, what costs and risks CBDC may have, and how this may affect broader policy objectives.”

On May 20, Federal Reserve President Jerome Powell announced that the Fed would compile a paper Discussion on the benefits and risks of CBDC, Stating: “As the use of fixed stocks increases, we should focus on proper regulatory and oversight frameworks.”