America Lags Behind in the Race for Digital Money
The Atlantic Council's think tank has raised concerns about the United States' sluggish advancement in central bank digital currencies (CBDCs), emphasizing that it is trailing behind countries such as China, India, and the European Union in shaping the future of currency.
In contrast to the proactive measures taken by China in advancing its digital yuan and the European Central Bank’s (ECB) ongoing preparations for a digital euro, the U.S. Federal Reserve has displayed caution in pushing forward with CBDC pilots. Some governors in the U.S. have expressed skepticism about the necessity of a CBDC, and even former President Donald Trump has voiced opposition, labeling it a “dangerous threat to freedom.”
According to Josh Lipsky and Ananya Kumar from the Atlantic Council’s GeoEconomics Centre, the technological innovation in payments at the Federal Reserve lags behind its global counterparts. As an illustration, they point out that the People’s Bank of China has over 300 professionals dedicated to CBDC work, while the Federal Reserve has fewer than 20.
The Atlantic Council emphasizes the importance of the Federal Reserve seizing the opportunity to establish standards and influence positive developments in the realm of CBDCs and payments.
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The authors warn that without U.S. technological models and standards, a fragmented system with diverse designs, cybersecurity standards, and messaging systems may emerge. This, they argue, would result in money becoming more siloed and less secure, contrary to the goals of being faster, cheaper, and safer.
The authors also criticize the broader tardiness of the U.S., pointing to the lack of progress in enhancing cross-border payments and the slow adoption of the FedNow system. They urge Fed officials to expedite exploration efforts on various payment projects, including faster cross-border transfers and CBDCs, to avoid being left behind in the rapidly evolving landscape of the future of money.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
