Bank of America A recent note shared by analysts stated that a CBDC to be issued would be different from the dihytal currencies currently available because the CBDC would be the responsibility of the Federal Reserve and not a ‘commercial bank’.
According to Bank of America, the United States will eventually central bank digital currencyIt looks like it will move forward to create a ni (CBDC).
Andrew Moss and Alkesh Shah, crypto strategists at Bank of America, wrote in a January 24 note that CBDCs are “an inevitable evolution of today’s electronic currencies,” according to a Bloomberg report. Analysts noted:
“As financial institutions explore digital asset custody and trading solutions and payments companies incorporate blockchain technology into their platforms, we expect stablecoin adoption and payments usage to increase significantly over the next few years.”
By the way, Federal Reserve Bank(FRB) published on January 20 “Money and Payments: The US Dollar in the Age of Digital Transformation” A report entitled, evaluated the benefits and drawbacks of potential US adoption of a CBDC.
It evaluated whether a CBDC could potentially “improve the secure and efficient domestic payment system” for households and businesses, possibly resulting in “faster payment options between countries” as the “payment system continues to evolve”.
Meanwhile, the company’s analysts Shah and Moss noted that the use of digital currencies issued by private companies is likely to increase. Currently, the responsibility for existing forms of digital currency, such as online bank accounts or payment applications, rests with private entities such as commercial banks.
However, in a statement regarding the report, the FRB wrote that the CBDC would be different in this respect because it would be the responsibility of a central bank like the Federal Reserve.
It also highlighted potential challenges such as maintaining financial stability, protecting users’ privacy and combating illegal transactions. The Fed also announced that it would make public comments on these issues until May 20.
CBDC is the digital version of a country’s fiat currency, such as the US dollar. In 2020, the Bahamas became the center of attention when it launched the world’s first CBDC, the “Sand Dollar.”
Meanwhile, China’s central bank is in the process of developing a digital yuan wallet as it accelerates efforts to create a digital currency. On the other hand, in April 2021, the Swedish central bank completed the first phase of the “e-krona” digital currency pilot.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.