- One of the most prominent rolls out by the U.S. Central Bank could be of Digital Dollar
- Various government authorities in U.S. are working tirelessly for evaluating CBDC
The decision to roll out the digital dollar by the U.S. Central Bank has been one of the prominent ones in 2021. The lawmakers see this year as a crucial year for introducing this new digital project to the nation’s people.
Ease of use, security access, delivery mechanisms, and privacy issues are some of the significant concerns that the officials are working on
testing of a CBDC should be checked and done in a proper manner
The Central Bank of the U.S. has been very optimistic about the digital dollar, and they are making every effort to make it happen. The authorities are busy working on how to proceed on a potential dollar project.
Jerome Powell, U.S. The Federal Reserve Chairman is very optimistic about the digital dollar project. He feels that 2021 is a significant year talking about the digital dollar and educating the public about it. The authorities issued a paper under which guidelines are described on how consultation would look like.
The Ups and Downs of CBDC
Jess Cheng, Fed Reserve Senior Counsel, Payments Specialist Angela N. Lawson, and Paul Wong, Technology Lab Manager, believe that it is essential to engage the public about the pros and cons of a U.S. Central Bank Digital Currency (CBDC).
The Fed Officials are working night and day along with the public aid to sharpen a digital dollar. Ease of use, security access, delivery mechanisms, and privacy issues are significant concerns that the officials are working on.
According to the authors, it is of utmost importance to understand the use case of CBDC to help in deciding whether to issue a CBDC and its potential design. But for that, one needs to engage with businesses, individuals, consulting with consumer groups, community organizations, and business associations.
Researchers and academia can also play an essential role in digital dollar projects. There is a need to have clarity on digital dollars. The authorities must understand how CBDC will be used and what are the possibilities of its usage. The technology should be in sync with the CBDC so that it supports across different conditions. It should also provide 24/7 instant settlement and secure transfers.
End-users of all ages, geographic locations, payment habits, financial literacy in the design and testing of a CBDC should be checked and done correctly. CBDC should also give unprecedented authority to the Central Bank to deal with matters of financial goings.
Congress would have to look into the CBDC matters. They would have to authorize the Federal Reserve to have legislative authorization over the digital dollar. It will be controlled as a centralized project by the Federal Reserve as per James Cunha, Senior Vice President, U.S. Central Bank, Boston Branch.
They have tested it on different technological platforms and blockchain tools, MIT digital currency initiative to find out the best platform that can support the digital dollar.
This idea to support the blockchain is getting a lot of attention. Janet Yellen, Treasury Secretary, supports the digital project as she believes that central banks should issue their digital currencies.
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