MasterCard, Citigroup, and others are collaborating with the Federal Reserve Bank of New York. They will undertake a 12-week pilot programme for a digital dollar system.
According to Reuters, the regulated liability network trial will be via a test set using simulated data. MasterCard and Citigroup will pilot the initiative with global banks HSBC and Wells Fargo.
The pilot’s goal is to see if banks can speed up payments. This is by utilising a tokenised form of the dollar in a shared database. As a result, the project varies from standard cryptocurrencies. They would rely on distributed ledgers rather than databases.
CBDC is the new digital money. It’s the next generation of cryptocurrency. It may change the financial future.
CBDC is a new form of digital currency that can be used anywhere in the world. You can buy goods and services and invest in businesses. It’s also safer than traditional banking methods. This is because CBDC is decentralised. So, there are no third parties involved in transactions. The power is completely in your hands!
Opinions range within the US government and the Federal Reserve over whether CBDCs are a good idea, with one US Senator proposing a CBDC ban.
A digital dollar is likewise opposed by many in the existing financial system. The alleged benefits of a CBDCa are uncertain. It will compromise banks’ business model.
The bankers stated in a letter to the Federal Reserve that a US CBDC is optional to digitising the dollar. The dollar is substantially digital now. CBDCs are controversial inside the US government and the Federal Reserve. One US Senator is suggesting a CBDC ban.
The main benefit of CBDC is to reduce the need for cash in circulation.
But some people may prefer something other than CBDC. They prefer decentralised cryptocurrencies with no single issuer.
Related: SoFi bank reveals over $166 million in crypto holdings
Why Do Some People Don’t Like CBDC?
Some are against CBDC. They believe that banks may control the money supply and manipulate interest rates. They think that this would make cryptocurrencies worthless.
When a bank wants to print more money, it must borrow from another bank or the Federal Reserve. This means that banks can only print as much money as they have access to. With CBDC, banks could create their own digital dollar currency at will. It doesn’t need any permission. So, responding quickly during a financial crisis or recession is easier. Want more crypto news articles? Check out Crypto Club Site now!
