Assessment: “This has gone from, ‘It’s an interesting idea,’ a few years ago to, ‘We need to have a pilot project,’” said Josh Lipsky, director of the Atlantic Council’s GeoEconomics Center, of a Fed-issued digital dollar.
The dollar is entering the crypto age, and the U.S. government is poised to give its clearest signal yet on how that will happen.
The guidance will come through a trio of pending reports related to public and private efforts to digitize the world’s global reserve currency. First, the Federal Reserve Board will release a paper as soon as this month on the U.S. payments system that’s expected to provide direction on whether the country should issue a so-called central bank digital currency. Soon after, the Fed Bank of Boston will publish long-awaited research and open-source computer code on technology that could underpin a digital dollar. Finally, the President’s Working Group on Financial Markets is set to issue policy recommendations on how to regulate stablecoins, which are in effect digital dollars created by private companies.
“He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads.” Rev. 13:16
When put together, the three reports will provide a road map for the broader financial community on how the Fed and Biden administration see the dollar’s crypto future playing out, the extent to which they embrace adoption of a digital currency and the guardrails they may see as necessary to protect individuals and investors in what’s now a largely unregulated corner of the market. What was once seen as a distant project has taken on an increased sense of urgency as the value of digital assets has exploded to about US$2 trillion and other countries, such as China, move forward rapidly with plans for their own sovereign digital currencies.
“and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name.” Rev. 13:17
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