cryptovibes.com
While several countries have launched or mapped out plans to roll out their central bank digital currency (CBDC), the debate about the benefits of the digital dollar is still taking center stage in the U.S.
The U.S. Federal Reserve is still deliberating whether to issue a CBDC. However, Federal Reserve Board Governor, Lael Brainard, highlighted several reasons why a digital dollar is necessary. The governor said a CBDC could bolster financial stability as the use of cryptocurrency and stablecoin grows.
She stated that it’s important for everyone to plan for the future of the payment system and look at all the benefits of introducing new technologies while maintaining stability.
A CBDC Will Provide Ease In The Digital Financial System
The digital dollar may be one way of ensuring that people around the world that use the US dollar can keep relying on the strength and stability of the U.S. currency, especially as other countries are launching their CBDCs. It will enable people to easily carry out businesses in the digital financial system, Brainard added.
However, there are divided opinions among U.S. Federal policymakers when it comes to the viability of CBDC.
While some are in support of Brainard’s view, others believe that its introduction will have negative consequences on the strength of the US dollars. Some Fed policymakers believe that there are potential risks of the impact of a digital dollar on the currency.
Brainard Asks Policymakers To Explore CBDC Benefits
Brainard, while supporting a CBDC, also mentioned the potential risks, emphasizing the need to look at the impact of a U.S. CBDC rather than concluding outright to adopt it.
She noted that financial stability and other safety measures should be put in place, even though there are several use cases for U.S. CBDC.
Those in support of a CBDC, in their view, say digital dollar can improve financial stability, bolster financial inclusion, and streamline payment systems.
But others against it are afraid of the costs as well as privacy issues that may come up when it is introduced. If a CBDC will be launched, it is certainly going to pass a lot of scrutiny from the U.S. Congress and the White House, as policymakers have indicated.