The US Federal Reserve hosted a meeting of speakers to discuss cryptocurrencies and the economy. Surprisingly, the panel unanimously supported the cause of digital assets. Panelists at the event asked that cryptocurrencies be allowed to grow in the US.
Using Crypto to Strengthen the Dollar
The panel went further to say allowing cryptocurrencies will only strengthen the US Dollar. The discussion hosted by the Federal Reserve has instigated interesting reactions.
The crypto market has been going through its unprecedented low for several months. The panel’s comments, nevertheless, come as a boost for the global community. But the big question still persists in the mind of cryptocurrency holders and traders.
Crypto users ask if the market will bounce back from its low state real soon. The panel said further that using cryptocurrencies could strengthen the US Dollar internationally. The panel laid emphasis on the usage of CBDCs to have the same effect.
The panel equally offered suggestions in relation to regulations in the crypto space. It said crypto services ought to be connected with the Dollar.
As quoted, digital assets might reinforce the role of the Dollar in the market. This will be in the course of the medium term. This could be achieved if the form of services around the digital assets. Such services will, thus, be connected with the US Dollar.
The Might of Cryptocurrencies
The Fed Chairman, Jerome Powell, acknowledged the fast growth of cryptocurrencies last month. With the observation of the growth, the Fed is considering the use of CBDCs.
Powell said the Fed is considering if the CBDC can improve the safe payment system. This will be focused on domestic payments for now. As stated by the Fed’s white paper, the CBDC might improve the Dollars’ position internationally.
More Potential Advantages of a CBDC to the US Dollar
The panel went on to further discuss some questions regarding the technical aspects of crypto. It involves if it could affect the advantage of the Dollar or improve its role. The panel noted that technology on its own can’t change the global currency system.
Crypto is presently centered around a retail investor ecosystem, the panel noted. It added that moving towards institutional investment is limited. This is due largely to an absence of a functional regulatory framework.
For now, developing a CBDC is with domestic retail payment in mind. It will, therefore, not pose a threat to the international position of the US Dollar. The idea of a cross-border CBDC is very far off.