Negotiations are underway to allow digital currencies to continue to exist in the US economy. The suggestion is to achieve this by linking cryptocurrencies to the US dollar. This contemplation took place in a meeting held by the US Fed on Tuesday.
At the meeting, a panel of speakers said that the dollar’s position with crypto assets in the US economy would further strengthen. In addition, it will also boost the digital currency industry.
Dollar Strength Could Improve Through Cryptocurrencies
The current state of cryptocurrencies is still causing some degree of unease in the minds of cryptocurrency traders. Many still doubt that the market will turn bullish at the earliest. With this in mind, the panelists thought it wise to mention the inclusion of these digital currencies in the US dollar.
He believes that this will improve the position of the dollar and the crypto community. The panel said that the increase will be possible as crypto traders continue to use these digital currencies, especially CBDCs. The change in the dollar will be evident in its role in the international market, he added.
Fed Chair, Jerome H. According to Powell, there is a tendency for altcoins and stablecoins to increase in price. He made this statement last month. This suggests that a move to link cryptocurrencies to the US dollar is in the pipeline. He added that the Federal Reserve is now assessing the use of CBDCs due to the rapid growth of these digital assets.
Related Reading | Bitcoin Weekly RSI Records Highest Selling in History, What’s Next?
The idea behind the evaluation is to know whether the CBDC will meet the criteria of domestic payment efficiency and security. Furthermore, according to the White Paper of the US Fed, CBDCs can make a positive contribution to maintaining the international position of the US Dollar.
CBDC as US Dollar Corrects
As the discussion progressed among the panelists, specific questions were addressed. One of which was whether or not the role of the dollar could be positively affected by crypto technology. They concluded that the technical aspects of these digital currencies alone cannot improve the ecosystem of this globally recognized currency.
There was a reason to support this response; The ecosystem of these cryptocurrencies revolves around retail investors only. Also, steps were taken to migrate to institutional investors, but they failed due to lack of regulatory framework.
Related Reading | Bitcoin Monthly Tag Lower Bollinger Bands, Producer of Tool Signals Downside
As a result, US CBDCs will focus on the retail sector. It blocks any threat to the US dollar while maintaining its international status. However, he also added that there are still restrictions on the possibility of using a cross-border CBDC.
Featured image from iStockPhoto, Charts from TradingView.com