- The US Federal Reserve is in the early stages of a possible CBDC.
- The European Central Bank looks to move ahead with its CBDC implementation.
Both the US Federal Reserve and the European Central Bank released updates regarding their Central Bank Digital Currency (CBDC) implementation. While the US Fed revealed that they are in the early stages of a possible CBDC implementation, the ECB potentially revealed that they are finally ready to move forward with the project.
US Federal Reserve update
Randal Quarles, the Vice Chair for Supervision at the Fed, revealed that its stance on CBDC implementation is still in the early stages. During this Thursday’s House Financial Services Committee hearing, Rep. French Hill (R-AK) questioned Quarles on how the Fed's attitude has changed in recent months.
Quarles responded by stating that the Fed has long been interested in the prospect. Plus, the recent rise in government-backed payment systems worldwide has caused the Fed to look even closer at a possible implementation. Quarles said:
I still think it would be premature to say that we believe that this is a solution that the United States would need to implement. We're weighing pros and cons, there are pilot projects in place. This is still in the early stages. I wouldn't say we've changed our stance and believe that this is something the U.S. needs.
Fed chair Jerome Powell, on the other hand, has emphasized caution over speed. He believes that it’s critical to “get it right, as opposed to being first.” He also stated that the bank needs to make sure that the bank doesn’t pre-empt cash or private digital currencies.
ECB update
European Central Bank President Christine Lagarde hinted that they could be creating a CBDC within a few years and it will have a significant impact on the euro zone’s financial sector.
During this Thursday’s virtual panel discussion, Lagarde said:
My hunch is that it [CBDC] will come. If it’s cheaper, faster, more secure for the users then we should explore it. If it’s going to contribute to a better monetary sovereignty, a better autonomy for the euro area, I think we should explore it.
Lagarde believes that it will take at least two or four years before the project can be launched. Regardless, the ECB took a significant step last month by launching a public consultation public consultations on the digital euro and experimenting with the new type of money. The final decision for full implementation will be made by the middle of 2021. Quite like Powell, Lagarde has also emphasized caution over speed.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Polygon joins forces with WSPN to expand stablecoin adoption
WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.
Coinbase envisages listing of more meme coins amid regulatory optimism
Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B
As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: Rally expected to continue as BTC nears $100K
Bitcoin (BTC) reached a new all-time high of $99,419, just inches away from the $100K milestone and has rallied over 9% so far this week. This bullish momentum was supported by the rising Bitcoin spot Exchange Traded Funds (ETF), which accounted for over $2.8 billion inflow until Thursday. BlackRock and Grayscale’s recent launch of the Bitcoin ETF options also fueled the rally this week.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.