CBDCs currently have limited use internationally, according to analysts at the Trust Project. Although the Fed is considering launching an American CBDC, it has not yet set a time frame.
The Trust Project is a global nonprofit consortium of news organizations dedicated to creating transparency standards. According to analysts from that network, central bank digital currencies (CBDCs) have a highly-limited cross-border reach.
The experts reached that conclusion during a discussion organized by the US Federal Reserve (Fed). In essence, the comments indicate that the impact of CBDCs, in their current state, is not significant.
The specialists had a session in which they addressed aspects related to crypto assets. They discussed topics related to the technologies behind cryptocurrencies, one of which was CBDCs.
The participants in the discussion said that CBDCs still had highly-limited cross-border applications. They mostly agreed that technology alone could not lead to drastic changes in the global monetary ecosystem.
They pointed to other crucial factors such as the rule of law, stability, network effects, and depth of markets. They consider that these are responsible for the advantages of the dominant currencies in the market.
The experts say that the crypto market focuses more on retail investors who enter in a speculative mood. In addition, they recognize that the lack of regulatory frameworks places limits on institutional investors.
However, the panelists agreed that digital assets could bolster the strength of the US dollar. That would provide hope for the cryptocurrency market if new services build around US fiat currency.
The US Federal Reserve Is Considering Launching a CBDC
For years, there has been much speculation about whether the Federal Reserve would launch an American CBDC. After other countries announced their initiatives, the central bank confirmed it would.
They have not released a timetable for launching the central bank digital currency. However, it may still be some time before the North American country can be ready.
The creation of a CBDC has received support, with Vice President Lael Brainard saying it could co-exist with stablecoins.
At present, the United States is experiencing high rates of inflation. The Fed has raised interest rates by 0.5%, the widest margin since 2000.
The monetary policies of the US government agency have led analysts to express their opinions. They have gone so far as to say that these measures have strongly influenced cryptocurrencies and their market cycles.
Sam Bankman-Fried, CEO of the exchange FTX, highlighted that the Fed is struggling to control the growing inflation. He said that it had reached its highest level since 1981 despite the effort from the government, investors, and citizens.
Cryptocurrencies play a relevant role in the world economy, which many governments do not overlook. They have worked on creating regulations to control their use and have considered launching their CBDCs.
Meanwhile, BTC is trading at around USD 20,155 and has accumulated a 2.0% gain over the last seven days. While its daily trading volume is above USD 23.21 billion, its market capitalization is about USD 385.86 billion, according to CoinGecko.
By Alexander Salazar
