The United States must win the CBDC race to maintain the monetary status of the world’s dollar reserve, says the Federal Reserve Governor

The Federal Reserve Governor has stated so The United States should be at the forefront of developing a central bank-issued digital currency (CBDC) to bolster the US dollar’s role as a global reserve currency..

In an announcement made May 24, Federal Reserve Governor Lael Brainard stated so Leading CBDC projects could have “significant effects” on the global financial system and urged the United States to ensure it plays a leading role in the burgeoning CBDC ecosystem::

“Given the potential of CBDCs to become more prominent in cross-border payments and the role of the dollar’s reserve currency, it is important that the United States be at the forefront in developing the cross-border standard.” ?? ??

The ad says that The Fed is “sharpening its awareness” on four key areas of CBDC development: “The growing role of private digital money, the migration to digital payments, plans to use foreign CBDCs in cross-border payments and concerns about financial exclusion”..

The United States must win the CBDC race to maintain the monetary status of the world’s dollar reserve, says the Federal Reserve Governor
The United States must win the CBDC race to maintain the monetary status of the world’s dollar reserve, says the Federal Reserve Governor

The governor explained and noted some of the potential benefits of adopting a CBDC The Covid-19 pandemic “accelerated the migration to digital payments” among US households and point it out It took “weeks” to distribute prepaid debit cards to aid households who did not have up-to-date banking information on file with the Internal Revenue Service.

“We need to investigate and try to anticipate the extent to which household and business needs and preferences may shift to digital payments over time.”, he added.

Brainard also stressed and suggested the potential risks associated with the widespread adoption of private stablecoins A CBDC could offer the gains and benefits associated with existing dollar stable tokens without undermining government control over monetary policy.

“Unlike central bank fiat currencies, stablecoins have no legal tender status. There is a risk that the widespread use of private currency for consumer payments will fragment parts of the US payments system, adding burdens and increasing costs to households and businesses. “, He said.

“In any assessment of a CBDC, it is important to be clear about the advantages a CBDC would offer over current and emerging payment options, the costs and risks a CBDC could bring, and how this could affect other policy goals.”

The Chairman of the US Federal Reserve, Jerome Powell, announced this on May 20 The Fed will produce a document that will discuss the benefits and risks of a CBDC. It says: “As the use of stable coins increases, we must also pay attention to the right regulatory and supervisory framework.“.

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