US: "Cryptowar" with China? The digital dollar is just around the corner

EUA: “Criptowar” com a China? Falta pouco para o dólar digital

Lael Brainard, governor of the US Federal Reserve, announced this Monday during a CoinDesk conference that the financial institution has stepped up its investigation into the launch of the digital US dollar and is about to release results.

"The central bank must anticipate changing consumer trends and ensure that Americans have access to safe central bank money," Brainard said.

The governor took a moment to highlight the risks inherent in listed coins such as Bitcoin. "If stablecoins were to be widely adopted and serve as the basis of an alternative payment system, oriented around new private forms of money, there is a real risk of a fragmentation of the payment system. The state needs to act," he reinforced.

Fed Chairman Jerome Powell said last week that the Fed will release a paper later this summer with a detailed analysis of the impact of cryptocurrencies on the payments system. To investors eager for this step Powell left a warning "in the navigation": regardless of any results of this investigation, "the launch of a digital dollar is directly dependent on the congressional seal of approval."

Last summer, the Federal Reserve and the Massachusetts Institute of Technology's Digital Currency Initiative announced a joint investigation to test a hypothetical state-owned cryptocurrency platform. The Fed dubbed the project "Hamilton," a reference to Alexander Hamilton, the Founding Father who laid the foundation for the American financial and banking system.

A month ago the Pentagon, the US Treasury, the State Department and the Security Council announced that they are investigating China's plans regarding the digital yuan. The White House fears that this is a subtle tactic by Beijing to knock the dollar from its global position as a transaction currency, since the digital yuan is exempt from exchange rates, a source close to Joe Biden confessed to the Bloomberg news agency.

In addition to financial competition, Joe Biden is concerned that this move is a way for Beijing to evade US sanctions in the long run.

The digital yuan is an online transaction currency that can be operated through the application created by the Central Bank of Beijing. In the initial phase, 100,000 Chinese have been invited to try out the new currency that will coexist with physical money already in circulation.

On Europe's side, the Commission has already made it known that it "supports the exploration of a digital euro project, as a potentially important element of a strong and innovative digital financial sector and more efficient and resilient payment systems," as European Commissioner for the Economy Paolo Gentiloni announced a week ago.

Share this article

Leave a Reply

Your email address will not be published.