The U.S. Federal Reserve announced plans to conduct a survey as early as this week that will focus on assessing the current advantages and disadvantages of issuing U.S. dollar CBDCs.
According to a Wall Street Journal report, the survey will be published through papers and newspapers that allow for further analysis of the study on community comments on the topic. However, this paper will most likely exclude any policy recommendations.
The follow -up will be the publication of several journals that will cover the technical aspects of the Digital dollar, highlighting the operating structure. This article is expected to be published by the Boston Fed along with researchers at the Massachusetts Institute of Technology.
The CBDC or digital dollar is a crypto asset backed by the U.S. central bank this has yet to see its bottom line with the Fed still differing on the matter. Proponents of the CBDC among the Fed claim that the CBDC could revolutionize the economy, by facilitating faster and cheaper domestic and international transactions. In addition, it can also offer a solution to the problem of poverty.
On the other hand, those who disagree argue that it has the potential to damage the financial system. According to a Philadelphia Fed report, the U.S. central bank’s CBDC. can cause instability of the financial system, especially during a crisis. Furthermore the situation will get worse when everyone starts withdrawing their money from the bank, along with mutual funds, stocks, and other investments, by converting the whole thing to CBDC.
The Chairman of the Fed, Jerome Powell also showed a cautious attitude towards the issuance of the CBDC. Powell, along with several other Fed officials claim that the CBDC is still in its infancy.
