Friday, November 25, 2022
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Digital dollar: the US Federal Reserve is hesitant

To be or not to be for the e-dollar? – The cryptosphere observes the China race ahead of the central bank digital currencies (MNBC). Already for a while, the country of Xi Jinping experiments in the field with its digital yuan. On the side of the United States and its Federal Reserve (Fed), it blows hot and cold. However, it is not progressing much.

The digital dollar does not excite Fed speakers

Recently, the president of the Federal Reserve American, Jerome Powellexplained that the question of a digital dollar should be “really explored”. The Fed even announced that it was preparing recommendations to help politicians in their decision-making on the subject.

However, the financial institution’s latest conference was much more hesitant on this domain of MNBCs. This conference, which focused on “The International Roles of the US Dollar”does not seem in any case not consider the development the digitization of the dollar as a emergency.

“Participants discussed questions such as whether certain technological aspects of digital assets, including MNBCs, could affect the benefits of the US dollar, or enhance its various roles. Participants broadly agreed that technology by itself would not lead to drastic changes in the global monetary ecosystem, as other factors such as rule of law, stability, network effects and depth of markets are crucial to the advantages held by dominant currencies. »

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Bitcoin, “not a threat”, but to watch anyway

Indeed, Fed speakers consider the scope cross-border MNBCs (from other countries) such as “fairly limited”. In any case, digital assets are not, as a whole, not perceived as a threatens important for the international roles of the dollar.

On the other hand, the participants understood rather well the idea behind Bitcoin (BTC) and cryptocurrencies decentralizedwhose exchanges cannot not be censored :

“(…) part of the demand for certain cryptocurrencies, like Bitcoin, is driven by the desire to escape capital controls. »

The China is a perfect illustration. Although authorities regularly chase Bitcoin and cryptocurrencies, they continue to attract investors. The king of cryptos even trades with a bonus in addition, compared to the market price.

In summary, Federal Reserve stakeholders seem neither concerned about adoption – yet growing – from Bitcoin and crypto-assets, nor by the digital yuan. Nothing to rush to a digital dollar. Is it blindness, or does the reign of the dollar king actually still have a bright future ahead of it?

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