It was announced long ago, and it has now been published: the US Federal Reserve’s report on the digital dollar. Americans are not the only ones considering adopting an electronic form of their currency. Even the Swiss National Bank (SNB) does this. However, the Executive Committee has so far ruled out the e-franc for the general public.
The only option is some form of payment transaction between large financial institutions and exchange with the same National Bank Swiss National Bank Also a test center in cooperation with the BIS.
Not only did central bankers freak out about Facebook’s drastically lower (today dead) plans to create a global digital currency based on existing hard currencies. For everyone, and especially for the Americans, the actions of strategic rival China served as an alarm bell.
Advance China as a driver
The Chinese are already running tests using the digital electronic yuan and are intent on introducing one. And if a superpower like China offers a stable and easy-to-use digital currency that can be used around the world, then in the long run it may crowd out other currencies that are at that time less usable. At least this is the source of concern in Western countries and especially in the United States, where there are fears of the global dominance of the dollar.
in the course 40-page report is still the Federal Reserve yet reserved. This lists the advantages and disadvantages of the electronic dollar. The first includes simplified payment options at home and abroad, the possibility of integrating more people into financial operations (“financial inclusion”), broader people’s access to safe central bank money, and finally an explicit defense of the US currency’s dominant international role.
Concerned about the financial system
The report identifies the risks of destabilizing the current financial infrastructure as a risk. This point is of great importance everywhere in the debate about government electronic money. Direct access to the central bank may harm the attractiveness of banks. Especially in times of great uncertainty, the alternative to safe central bank money for bank accounts threatens to intensify the scramble for it, which could exacerbate the crisis.
The Fed fails to make a critical assessment in its report and sees it as just the first step in a broad public and political debate. The authors write explicitly: “The Federal Reserve will only seek to pursue plans for a digital currency within the framework of public and cross-governmental support.” Where the trip will take us will depend mainly on how plans develop in other countries, especially China, and private initiatives.
This article first appeared in the digital edition of “Handelzeitung” under the title: “Federal Reserve reports on e-dollar“