Fed Is Not Under Any Pressure To Launch CBDC
Fed chief, Jerome Powell, has revealed that the US federal reserve hasn’t given up on launching its national digital currency. But it’s only taking its time on the issue.
US Not In A Rush To Pilot CBDC
Powell made this revelation during a recent news conference while speaking on the authorities’ CBDC plans. He said that the federal reserve is actively researching the suitable format for the CBDC. He added that “we want to base our decision on public policy and technology. We want to ensure that benefits of the CBDC and other new fintech initiatives far exceed their risks.”
Powell also said that the authorities are not in a rush to create its CBDC even though many apex banks have launched theirs or are in the process of launching their own. He reiterated that the most important aspect of creating a national digital currency is to do it the right way and not rush things. Then, he said America isn’t lagging behind in terms of creating a national digital currency.
Criticisms And Counter-Criticism For CBDC
The popularity of national digital currencies has soared following constant criticism of private digital currencies by global financial institutions and authorities. As widely reported, top financial institution HSBC recently declared that it would prefer a national digital currency to virtual currencies, including stablecoins.
Famous figures such as senator Elizabeth Warren have never shied about her support for CBDCs over digital currencies, often labeling the latter as illegal money. However, some analysts have argued otherwise. Earlier this month, a top columnist with the WSJ news firm, James Mackintosh, opined that issuing a national digital currency could negatively impact interest rates. Also, Chris Waller opined that the US government’s creation of a CBDC can be likened to creating a solution without having a problem to solve.
Bhutan’s Apex Bank Partners With Ripple To Trial Its CBDC
Bhutan’s apex bank hopes that a CBDC will improve its economy by over 80% over the next three years. Ripple confirmed the partnership agreement by releasing an official announcement via a blog post. The country is unique globally for being carbon-negative.
Hence, Ripple is convinced that its CBDC solution agrees with its company objectives. Ripple further emphasized that it would provide Bhutan’s apex bank with enhanced features better than what’s obtainable with other blockchains. This is not the first time Ripple would partner with a country to create a crypto-built payment option.
Last month, Ripple collaborated with GME remittance to pilot a crypto payment option for Siam commercial bank (one of Thailand’s top banks). One other advantage of this partnership is that it would facilitate payment solutions between Thailand and South Korea, especially as there are over 175,000 thousand Thailand nationals residing in South Korea.
One of Ripple’s top executives, Emi Yoshikawa, remarked that Ripple’s innovative solution would help both country’s nationals complete payment settlements without any restriction and at any time of the day including holidays and weekends.
The increasing growth of the digital asset space continues to necessitate the need for crypto regulation across all regions. However, some authorities are still in denial about this fact.
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