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The policy research director at the Digital Dollar Project said that the Federal Reserve is waiting for Congress to initiate legislation on CBDC, for them to proceed further.
A number of central banks across the world have been working on central bank digital currencies (CBDCs), however, the US Federal Reserve has been a bit slow in this regard. While there’s been no major news with respect to the Digital Dollar recently, things do seem to be moving ahead.
Michael Greco, policy research director at the Digital Dollar Project recently said that there’s not a question of ‘if’ but ‘when’ regarding the establishment of the Digital Dollar in the United States. Greco’s comments came during his interview with CoinDesk TV’s “First Mover” show on Tuesday, December 27.
He said that the Digital Dollar might see the day of the light in the next few years without mentioning the actual timeline. But Greco said that the Federal Reserve is waiting for Congress to enact legislation before it can move ahead. Although he doesn’t expect Congress to pass such a law next year, Greco believes that the conversation to advance on Capitol Hill, especially in regard to privacy” in 2023.
The soaring inflation in the US has kept the Fed on the edge and busy focusing on other key macro factors. Once things look under control, probably the Fed might have a serious consideration over the Digital Dollar project.
Nearly 87 countries across the globe have initiated some talks or pilot projects over CBDCs. Countries like The Bahamas and Nigeria have rather made quick moves to push the use of digital money and reduce the influence of cash in their economies.
Not to forget, China has been the major economy that has been steadfast in the launch of its Digital Yuan. The PBoC has been devising several ways to push the use of CBDCs among merchants and consumers.
US vs Other Major Economies
Although the United States has been a bit slow in the CBDC developments, its competing democracies are making a move. Josh Lipsky, senior director of the Atlantic Council’s GeoEconomic Center, recently said that CBDCs are making “huge leaps” in other parts of the world such as Europe and South Korea.
In 2023, the European Central Bank is likely to move ahead with the pilot phase of the Digital Euro from its development phase. This could be a major step given the size of the European Union. He further noted that the US authorities would wait to see how the ECB tackles privacy concerns with CBDCs and how they can interact efficiently with the existing banking systems.
Lipsky also sees greater potential in a wholesale CBDC suitable for transactions between banks instead of retail CBDCs.