Panelists didn’t see any urgent need for a CBDC. The U.S. seems to be stuck in developing a central banking digital currency. Federal Reserve policymakers are discussing the technology, but they have not revealed whether any progress has been made.
On Tuesday, Fed officials and economic advisors discussed the international role and potential benefits of a CBDC.
A Fed statement stated that the panelists agreed that technology alone would not cause significant changes to the global currency ecosystem.
A CBDC is a digital copy of a country’s fiat currency, such as the British pound and the euro. It is supported by a central bank. These assets are centralized, and not like cryptocurrencies like Ethereum or Bitcoin .
Many countries are also researching CBDCs’ utility, but China seems to be ahead of the curve with its digital currency. In January, the country launched a digital wallet that citizens could use.
It is hoped that countries will be able to go cashless, while simultaneously enhancing security and speeding up payments. The central bank of the largest economy in the world has stated repeatedly that it is just researching digital dollars. Today’s conference proved that they are not in any hurry to release one.
In January Bank of America stated that a digital currency could be used to maintain its status as the reserve currency of the world. Panelists today saw no reason not to pursue the potential benefits.
“Panelists didn’t express material threats to international roles of dollar arising out of digital assets in the near run,” said the Fed. It also suggested that digital assets could strengthen these roles over time if new sets are created around these assets and linked to the dollar.