Cryptocurrencies are considered as one of the more original financial sectors. It should not be surprising that the Federal Reserve has also been interested in them. Recently, it has been publicly announced that the creation of a digital currency is being considered — one which would replace the traditional US currency.
The Boston Federal Reserve Bank is currently working with the Massachusetts Institute of Technology. The aim of this cooperation is the creation of a digital currency for the central bank. The time spent on this activity will be approximately 3 years.
A FED official has informed that:
“Given the important role of the dollar, it is important that the Federal Reserve remains on the front line of the CBDC research and technological development front. In this research, central banks are exploring the potential of innovative technologies in order to offer a digital counterpart to cash. Like other central banks, we continue to assess the opportunities and challenges related to the CBDC, as well as the use of this technology as a complement to cash and other payment options.”
The implementation of financial solutions
The introduction of the CBDC requires the regulation of the digital currency in this sector and going through the whole legislative process.
Another issue is the creation of the currency itself and the implementation of Federal Reserve structures needed to control it.
“In addition, a comprehensive legislative process, together with broad considerations and cooperation with other parts of the federal government and a wide range of other interested parties, would be necessary to consider the introduction of the CBDC,” indicates the FED official.
The subject is original and controversial. For these reasons, its implementation is to be officially published on a regular basis!
“Lessons from this cooperation will be published and any code base created under this initiative will be offered as open-source software for anyone who wishes to experiment with it,” said Lael Brainard.
If FED is successful in creating its own cryptocurrency, then perhaps other countries will also go in this direction. What will the financial impact be for the cryptocurrency sector and fiat currencies? We will most likely find out in the coming years!