TL;DR Breakdown
- While every country has been trying to release its own CBDC, the US has been left out.
- The lack of a digital dollar will become problematic for the nation, as the Federal Reserve Governor claims.
- This makes the position of the digital dollar quite unclear. Meanwhile, China has been testing the digital yuan.
Central bank digital currencies have become quite popular as nations across the world have been busy developing their own CBDCs. A government-backed CBDC would establish trust among the citizens while improving the economy of the nation.
The dollar – being the world’s most traded fiat currency, has had an increased demand for a dollar CBDC. The digital dollar has been in discussion for a long time, and Jerome Powell also revealed that the report on the development of the CBDC would soon be out.
The Federal Reserve Governor made her views on the absence of the digital dollar clear in her recent statement.
The Federal Reserve Governor on the absence of digital dollar
The Federal Reserve Governor was present at the Aspen Institute Economic Strategy Group and using the platform, and she conveyed her views on the release of a government-backed CBDC.
Lael Brainard, the current Federal Reserve Governor, stated the importance of the fact that other countries like China are currently testing their own version of CBDCs while the US has still not produced the digital dollar. This makes the situation quite difficult for the US.
Digital dollar release is needed.
The Governor pointed out that while every country is looking to bring about a change in their payment system, the US is lagging behind. The introduction of a CBDC will help people during times of pandemic or other natural calamities.
Lael also mentioned that the increasing number of stablecoins in the market without a digital version of the dollar backed by the government would make a negative impact on payment systems.
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