Fed Governor: Not Having A Digital Dollar Is Not An Option Anymore

By Bhushan Akolkar
Published August 2, 2021 Updated August 2, 2021
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Fed Governor: Not Having A Digital Dollar Is Not An Option Anymore

By Bhushan Akolkar
Published August 2, 2021 Updated August 2, 2021

It is clear that the next big economic dominance will depend a lot on the central bank digital currencies (CBDCs), and the top two economies – the U.S. and China – are taking the battle to the next level.

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Last Friday, July 30, Fed Governor Lael Brainard stressed that not having a Digital Dollar in place is no more an option. Brainard note several reasons of “urgency” behind this issue, reports Reuters. Speaking to the Aspen Institute Economic Strategy Group, Brainard said:

“The dollar is very dominant in international payments, and if you have the other major jurisdictions in the world with a digital currency, a CBDC (central bank digital currency)offering, and the U.S. doesn’t have one, I just, I can’t wrap my head around that. That just doesn’t sound like a sustainable future to me.”

Probably by this month-end, the U.S. central bank might release the official research paper on CBDC aka the U.S. Digital Dollar. The Fed has involving itself to a great extent in the digital currency universe.

Even Federal Reserve Chairman Jerome Powell has been keen on this matter! Last month in July, the Fed Chairman gave a press statement stating that the world won’t need public cryptocurrencies once they have the Digital Dollar.

Combating the Rising Clout of Stablecoins

One more thing that’s making the Fed nervous is the rising clout of stablecoins aka the fiat-pegged cryptocurrencies. The Fed governor noted that these stablecoins aren’t backed by any government.

Lael Brainard further added that stablecoins can fragment and proliferate the financial system. She added:

“In a world of stablecoins you could imagine that households and businesses, if the migration away from currency is really very intense, they would simply lose access to a safe government backed settlement asset, which is of course what currency has always provided.”

Besides, she adds that CBDCs can play a key role in passing the stimulus benefits, especially during the time of such a pandemic. Explaining further importance, she stated: “One of the most compelling use cases is in the international realm, where intermediation chains are opaque and long and costly”.

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Bhushan Akolkar
715 Articles
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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