It seems that the United States will ultimately move towards the development of its CBDC (central bank digital currency), as per the Bank of America. Alkesh Shah and Andrew Moss – the crypto strategists at the Bank of America – noted in a note that the implementation of CBDCs is inevitable for advancement in the current electronic currencies, as per a report by Bloomberg.
The analysts stated that they expect the adoption of stablecoins, as well as their utilization for payments, to surge to a significant extent during a few of the upcoming years because the financial organizations delve deep into the custody of digital assets along with trading solutions as well as payments blockchain technology is incorporated by the companies into the platforms thereof.
In the meantime, a report called “Money and Payments: The U.S. Dollar in the Age of Digital Transformation” (being published on 20th January) on the behalf of the FRB (Federal Reserve Bank) described the disadvantages and the benefits of the United States by a CBDC adoption. It suggested that the secure and efficient system of domestic payments could be improved by a CBDC for the businesses as well as the households because the payment system persistently evolves, probably to provide rapid payment facilities among the countries.
Meanwhile, Moss and Shah disclosed that the utilization of private companies’ issued digital currencies will be broadened up. At present, private entities like commercial banks are responsible for dealing with payment apps, or online accounts for cryptocurrency’s existing forms. Nonetheless, the matter of CBDC would significantly be distinctive as it would be the responsibility of a central bank like the Federal Reserve, as noted by the FBR in its statement regarding the report.
It moved on to reveal the likely difficulties such as confronting the illegal transactions, protecting the consumers’ privacy, as well as the preservation of financial stability. The Fed is inviting the common masses to comment on the respective problem until 20th May. The digital form of the fiat currency of a country, like the United States dollar, is called a CBDC.
In 2020, these currencies grasped wider-level attention when the world’s initial CBDC was launched by the Bahamas under the title of Sand Dollar. Currently, the central bank of China is busy developing a wallet for its digital yuan, as included in its endeavors for the digital currency thereof.
