The US Risks Getting Left Behind on CBDCs
The Federal Reserve's “wait and see” approach to digital currency could deprive the U.S. of important fiscal and monetary tools as its rivals move ahead.
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A paper published by the European Central Bank (ECB) discusses various conditions for successful implementation of central bank digital currencies (CBDCs) such as the eurozone’s own digital euro. The authors also point to different risks that such projects entail, like the danger of crowding out the private sector.
ECB: Digital Euro Should Be Widely Used for Payments, Not Investment
In order to create a successful CBDC, a monetary authority needs to establish the digital currency as a widespread means of payment and exchange that also has a sufficient store of value....
While CBDCs could help central banks address the decline in cash payments, some risk factors remain. Central bank digital currencies, or CBDCs, could pose a threat to financial systems if related risks are not managed, Big Three credit agency Fitch Ratings has warned.Fitch Ratings released a report on Monday entitled “Central Bank Digital Currencies: Opportunities, Risk and Disruption,” which discussed the major trade-offs between risks and benefits associated with CBDCs.Fitch Ratings stated that the key benefits of a retail CBDC lie in its potential ability to expand government-backed....
A reading of two recent op-eds on central bank digital currencies (CBDCs).
Digital currencies, those issued by central banks in particular, have been commended for their “disruptive nature.” The praise comes from a publication associated with one of Brazil’s far-left parties. A recently published article claims that CBDCs such as China’s digital yuan can radically change global finances and government policies. Digital Yuan to Do Away With America’s ‘Exorbitant Privilege’ Vermelho, a news portal linked to the Communist Party of Brazil, points out that the People’s Republic is the world’s first major economy....
On October 9, whistleblower and privacy advocate Edward Snowden published an opinion editorial concerning central bank digital currencies (CBDCs) and claimed CBDCs are “the newest danger cresting the public horizon.” Snowden stressed that rather than being an innovation, CBDC’s are “closer to being a perversion of cryptocurrency” and a “cryptofascist currency.” Snowden Stresses CBDCs ‘Are Expressly Designed to Deny Its Users the Basic Ownership of Their Money’ While politicians and the modern banking cartel have been all about....