When It Comes To CBDC Implementation, Government’s Inefficiency Is A Blessing

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EDITOR'S NOTES

The slow crawl of the U.S. government towards implementing Central Bank Digital Currencies (CBDCs) is ironically our saving grace. Its bureaucratic sluggishness is a temporary shield against the looming digital dystopia. The Federal Reserve’s hesitance, tied up in red tape and needing Congressional approval, is inadvertently protecting us from a future where financial surveillance is the norm, and privacy is a hollow word. But this “blessing” won’t last forever. CBDC implementation isn’t a matter of if, but when – and for now, the government’s delay is the only thing standing between us and a complete financial tyranny.

The Federal Reserve continues to pilot a central bank digital currency, but will not issue one without executive branch and Congressional support, the report said.

Central bank digital currencies (CBDCs) are coming, but a digital dollar is unlikely in the near term, Bank of America (BAC) said in a report on Monday.

Central banks representing 67% of countries around the world and 98% of global gross domestic product (GDP) are exploring CBDCs, and 33% of them are in advanced stages, the report said.

CBDC is a digital currency that is issued by a government and is normally a tokenized form of the country’s fiat currency.

“The Federal Reserve (Fed) continues to pilot CBDCs but has not committed to a CBDC and will not issue one without executive branch and Congressional support,” analysts led by Alkesh Shah wrote.

“CBDC benefits and risks depend on the design and issuance approach, but we expect CBDCs to provide a more efficient and less costly payment system for cross-border and domestic payments, a tool for monetary policy implementation and improved financial inclusion,” the authors wrote.

Still, “they may also drive competition with bank deposits, more frequent bank runs, loss of monetary sovereignty and tensions among countries globally,” the bank said.

Central banks and governments are expected to drive digital asset innovation by “leveraging the private sector and beneficiaries to emerge across all phases of CBDC implementation.”

Bank of America reiterates its view that CBDCs have the “potential to revolutionize global financial systems.”

The Swiss National Bank (SNB) said earlier this month that it was working on a wholesale CBDC pilot alongside the SIX Digital Exchange (SDX) and six commercial banks.

 

Originally published by: Will Canny on CoinDesk

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