According to Federal Reserve, Governor United States must win the CBDC race.

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According to Federal Reserve, Governor United States must win the CBDC race.
Ravi Gupta | Bitcoin World

The federal reserve governor has argued that the United States must be at the forefront of developing the central bank-issued digital currency. It is needed to bolster the role of the US dollar as a global reserve currency.


Global Financial System


On May 24th, Lael Brainard, the federal reserve governor, made an announcement. In the announcement, she asserted that the leading CBDC projects could significantly affect the global financial system. Hence, she urges the United States to ensure that it plays a leading role in the burgeoning CBDC ecosystem.


Announcement


The announcement makes it clear that Fed is sharpening its focus on four areas of CBDC development. The four areas are the growing role of digital private money, the migration to digital payments, plans for foreign CBDCs in cross-border payments, and the concerns about financial exclusion.


Potential Benefits

In addition, the Governor also offered some of the potential benefits to adopting launching CBDC. She also asserted that the covid-19 pandemic had accelerated the migration to digital payments among Us households.


Prepaid Cards

She also noted that it took weeks for prepaid cards to be distributed as a relief to households. Moreover, they did not have up-to-date bank information filed with the internal revenue service. She also added that they must explore and anticipate the extent to which households and businesses’ needs and preferences may migrate further to digital payments over time.


Stablecoins

Brainard also emphasized the potential risks associated with the widespread adoption of private Stablecoins. She also suggested that CBDC provide utilities and benefits associated with existing USD stable tokens without undermining the government control over monetary policy.

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