Does the world need digital currencies?
The crypto community, like different communities of other financial markets, is staring at the statements of "Jerome Powell", which are normally influential in the economic markets and on which many investor selections are based.
Federal Reserve Chairman Jerome Powell spoke about the trouble of a digital greenback all through a listening to before the US House of Representatives Financial Services Committee on Wednesday, July 14.
The Federal Reserve Chairman referred to that one of the most important reasons the US central bank owns digital forex is that it will minimize the need for different public cryptocurrencies and digital stablecoins.
He introduced that a digital greenback would be a more plausible choice to digital currencies.
As mentioned with the aid of Powell:
I assume that would possibly be the case and I think this is one of the arguments made in favor of the US digital currency.
In particular, you will now not need stablecoins, and you will no longer want cryptocurrencies if you have a US cryptocurrency.
I suppose this is one of the strongest arguments for a digital dollar.
In September 2021, the Fed will launch its first legit dialogue paper on the digital dollar.
This will be a important step in determining the Federal Reserve's future motion on developing its personal digital currency.
Powell pressured that extra regulations are wished to push stablecoins to play a higher position in the monetary system.
Appropriate regulatory framework for stablecoins:
The Fed Chair agreed with latest remarks from Fed Governor Lyle Brainard.
In May 2021, Brainard said that agencies and households should be affected by using a fragmented payment system containing too many stablecoins.
It will therefore be critical to have a acceptable regulatory framework in area to manage the stablecoins.
Powell commented on this in Wednesday's session, saying:
We have a very sturdy regulatory framework around financial institution deposits, for example, or cash market funds.
This does now not currently exist for stablecoins, and if they are going to end up an necessary phase of the payments world, which we do not think cryptocurrencies will be in but perhaps stablecoins, then we need a acceptable regulatory framework.
Powell already told that if the Fed have been to come forward with a CBDC, he would almost honestly seek advice from with the public and Congress.
The US dollar still dominates its role as the world's reserve currency, but central financial institution cryptocurrency trends such as these in China and different components of the world may additionally deliver some threats to the US dollar stronghold going forward.