It is not difficult to understand why the central bank of the United States is particularly resistant to any change in the existing financial system. However, it is well understood that the renunciation of the legislators should be taken to launch a digital dollar, so it is not excused for the length of the regulation of the cryptocurrencies.
CAMBRIDGE The governors of many countries, mainly China, are experimenting with the digital currencies of central banks (CBDC for its English shipping). Money 3.0 is advancing to all speeds and, with its recent technical documentation, titled “The Dollar of the State in the Age of Digital Transformation,” the United States Federal Reserve, clearly stated, has finally begun to intervene, albeit only slightly enthusiastic. The Fed caution is necessary, but is it excessive?
The Fed is taking an extreme step towards introducing a digital minority dollar. By the way, we think that the new form of currency should burn more effective ways than other methods, especially in reference to the digital stables that are linked to the dollar and the existing bank accounts. For example, a digital profit benefit would offer a “real-time compensation” for small paychecks, which by default the currency in paper has, and the Fed plans to introduce electronic payday loans within 24 hours banks. The digital currency also needs to protect privacy (Chinese authorities say the same) and should not facilitate criminal activity, which is ironic given the popularity of the $ 100 ticket in the global clandestine economy.
The most problematic of all is the Fed’s demand that the benefits be gained from introducing a super dollar digital dollar that can be created. It’s a very difficult obstacle to reason. In addition to all the shortcomings of the existing financial infrastructure of the world, its internal functioning has been essentially intact for decades. Imagine a pesadilla scenario in which a poorly designed digital dollar would open a “pure gateway” that would allow an extraterrestrial host host to be locked into the global financial system based on a single dollar.
Dejando de lado los riesgos, no it is difficult to understand why the Fed is particularly reluctant to make any quantitative change in the existing financial system. After all, the international domination of the dollar brings the infinity of benefits to the United States. Reduce the interest rates that have been paid by the citizens and corporations of the state, in order not to mention those to the mayor of the world, the governor of the United States – Valéry Giscard d’Estaing, the Minister of Finance of France, the “exorbitant privilege” of the United States.
Dominion of the dollar also gives North American authorities an influence on the structure of the global financial system, including privileged access to information on global dollar transactions. Assimilation, allowing the United States to impose significant financial sanctions. Russia has been the subject of selective financial sanctions since its annexation of Crimea in 2014, according to President Biden’s administration Joe Biden has now launched a major offensive in the event of a Russian invasion of Ukraine.
While other central banks are leading the way in introducing digital currencies, some argue that the Fed may find itself in the position of Eastman Kodak (which has a fortune processing paper) when it comes to digital photography, or the makers of watch clocks digital watches are becoming popular.
But there is another reason for the retention of the Fed in front of the digital dollar: United States are fundamentally a democracy and a market economy. If the governing body has a considerable regulatory and legal power to implement the adoption of its digital currency, this application has only one point. It is not possible to oblige the North American population to accept a transition that is not necessary. ¿Recuerdan when the Treasury intends to popularize 2-dollar tickets because of a one-hour money laundering impression?
In a way that, when the United States effectively intends to introduce a digital minority dollar – something that will happen in the future – it is only a matter of time before a murder is committed. At present, the range of technologies and options available to the CBDC are unlimited. (The Singapore Monetary Authority has recently launched a contest to design the digital Singapore dollar and the final round – and each participant as juez- has less than 15 different entries) -. If the Chinese government decides to elect the equivocal technology for its CBDC, it can say everything in the world that needs to go backwards. But if the Fed’s first intention is with a digital currency fracture, debiting a lack of public interest and a political acumen, then it will be time to spend decades trying new ones.
A question that apparently appeared in the Fed’s technical documentation is the regular plan of the financially decentralized technologies of Web 3.0, a domain where the authorities have until the moment they are lost in action. In particular, state regulators in need of emergency do much more to guide and restrict the collection of private cryptocurrencies and their many derivatives. As Senator Elizabeth Warren stated, “the cryptocurrencies are the new bank in the shadows.” The generalized view that cryptocurrencies are mainly used for inversion and not for transactions and capital flows – a vision to which the Fed’s document is a further illusion, as demonstrated by recent research.
The president of the Fed, Jerome Powell, said he would like to introduce a CBDC statute of limitations on the demand for cryptocurrencies. This is one of the Fed’s motivations for producing its technical documentation. For large part of the demand for cryptocurrencies such as Bitcoin provides for the global emerging economy, there are for sale illegal drugs on the Internet, evasion of sanctions on the part of Russian oligarchs, capital flight, money laundering or tax evasion.
The actual need for a strict regulation of the use of cryptocurrencies by the advanced economies, and other CBDCs as such are being used at international level. The Fed’s reticence about launching a digital dollar is inevitable, but there is no excuse for the slow pace of regulatory reform.
The author
Former economist at the International Monetary Fund, he is Professor of Economics and Public Policy at Harvard University.
Reference-www.eleconomista.com.mx