On the 17th of June, the Chair of the US Federal Reserve stated that the digital dollar can help safeguard the United States’ international standing.
In the research conference held by the central bank, Powell emphasized the positives of hosting a Central Bank Digital Currency (CBDC). Before the Conference, the Fed embarked on public consultation for CBDCs, which lasted four months. Notably, the Vice-Chair of the Fed has backed the idea of developing a CBDC to improve existing digital payment systems. However, Chris Waller, the Fed governor does not see the need to adopt a digital dollar.
Following the slight differences, Jerome Powell mentioned that the Fed will think about the current state of global finance as well as expected evolutions in the next five to ten years. He also added that the USD has some fundamentals which will not be compromised. These fundamentals include; a commitment to transparency, the rule of law, and the full independence of the Fed.
Will Central Bank Digital Currencies Cause a Paradigm Shift?
Globally, more nations are exploring Central Bank Digital Currencies. Ten countries have successfully launched their digital currencies and hundreds of other nations are in the experimental stage. Notably, China is one of the nations that has succeeded in its CBDC innovation, and they seem to pose a threat to the United States. About a month ago, the US made plans to ban apps that support the Chinese e-currency from Google PlayStore and Apple Store.
Aside from China, Cambodia and the Bahamas also lead the CBDC charts. With more nations coming joining the train, CBDCs may end up being a necessity in the world of finance.
While some CBDCs exist on the blockchain, some others are hosted without the use of blockchain technology. Undoubtedly, CBDCs will give nations an edge in finance tracking and data management.