Members of a panel discussion organized by the United States Federal Reserve (Fed) have stated that the scope of cross-border use of central bank digital currencies (CBDCs) is currently quite limited.
The gist of the comments was that CBDCs, as they are at present, will not have any significant impact on the world.
A panel session was devoted to addressing issues related to digital assets. Panelists spoke on topics related to the technologies behind cryptocurrencies, and CBDC was one of them.
Panel members noted that the scope of cross-border applications for CBDCs is still very limited. The official note from the conference reads:
“The panelists generally agreed that the technology by itself would not significantly alter the global currency ecosystem, as other factors such as the rule of law, stability, network influence and depth of markets are critical to the gains of major currencies. . “
It added that the crypto market is more focused on retail investors, who enter with a speculative frame, also acknowledging that institutional investors are limited due to the lack of regulatory framework.
But in what may be some modest hope for the cryptocurrency market, the panelists agreed that digital assets could indeed strengthen the dollar’s strength “if a new set of services structured around these assets are tied to the dollar in the medium term.” in term.”
The US Fed Is Definitely Considering a CBDC
There has been a lot of speculation over the years as to whether the Federal Reserve will launch a CBDC. After years of silence while other countries announced the initiative, the Fed finally confirmed that it was considering a digital version of the dollar in April.
No timeline has been published on the launch of the CBDC, and with the recent comments at the conference, it could take some time before the country is ready. There has been some support for CBDCs internally, with Vice-Chair Lyle Brainard noting that CBDCs and stablecoins can coexist.
Meanwhile, the US is facing high inflation rates. The Fed raised interest rates by 0.5%, the biggest margin since 2000. The agency’s monetary policies have led some market analysts to say that it has a strong influence on crypto and its market cycles.