Although US authorities continue to dabble with the idea of issuing their own central bank digital currency, the Bank of America believes such a product is “inevitable.” Additionally, researchers from large banking organizations see stablecoins continue to flourish and take a massive role in the monetary system. CBDCs are a growing trend among central banks, with more and more countries outlining plans to release such products.
Some countries have already launched CBDCs.
A few countries already have digital versions of their national currencies. However, the US has always seemed somewhat lagging, with Fed Chair Jerome Powell claiming that the country has to do it right instead of being first. Moreover, the world’s largest economy believes China will not work inside its borders. Nevertheless, certain reports claim from time to time that the US is making strides in looking at how to launch a CBDC. The Bank of America believes that such a product will see the light of day in the US between 2025 and 2030.
“CBDCs are inevitable.”
Citing bank strategists Alkesh Shah and Andrew Moss, Bloomberg reported that CBDCs “are an inevitable evolution of today’s electronic currencies.” As reported earlier, the Federal Reserve issued a report last week examining the pros and the cons that could come from a central bank digital currency. The paper said it could lead to faster settlements and less expensive transactions costs. On the other hand, CBDCs could work against people’s privacy as the governments can monitor and control the issuance and the transactions.
Stablecoins are an essential part of the cryptocurrency industry, which is evident by their growth in the past few years to a multi-billion dollar portion of the market. As of now, there’re two stablecoins in the top five largest cryptocurrencies by market cap.