Around 98% of the world is looking to launch a Central Bank Digital Currency (CBDC) ushering into a new era in the financial world. Out of the 198 countries in the world, 130 nations are currently working on CBDC and launching pilot test runs. The US is disinterested in turning the dollar into a CBDC digital currency despite de-dollarization threats from BRICS. The development of CBDCs gained momentum after BRICS called for de-dollarization initiatives early this year convincing developing countries to end reliance on the US dollar.
Also Read: BRICS Is Now Richer Than G7 Countries
Will the US initiate a CBDC program to thwart the threat of de-dollarization from BRICS to keep the dollar afloat? In this article, we will highlight what the Federal Reserve has to say about launching a US dollar CBDC currency.
US Dollar Will Not Turn to CBDC Despite BRICS De-Dollarization Initiatives
The Board of Governors at the Federal Reserve Michelle Bowman remains unconvinced about the US dollar’s need for CBDC currency. She questioned the idea of a CBDC for the dollar articulating that it does little to nothing to help the US economy. Bowman said that instant payments are already in place and CBDCs will not solve any issues plaguing the financial sector.
She also called CBDCs “significant risks and tradeoffs” like disrupting the traditional banking system. “I have yet to see a compelling argument that a US CBDC could solve any of these problems more effectively or efficiently than alternatives, or with fewer downside risks for consumers and the economy,” she said. “The potential benefits of a U.S. CBDC remain unclear,” Bowman summed it up.
However, the Federal Reserve governor has called for more research into CBDCs and asked Central Banks to monitor the developments. In conclusion, the US dollar will not become CBDC at the moment and will not take on BRICS de-dollarization efforts.