Bank of America considers that stablecoins will enter a period of increased adoption in the United States. The Fed published a document that does not establish a position on whether or not the US will adopt CBDCs.
According to the Fed, digital means of payment and central bank digital currencies (CBDCs) offer potential challenges and opportunities. In that regard, Bank of America considers that the arrival of the digital dollar is inevitable for the United States.
Alkesh Shah and Andrew Moss, strategists of the Bank of America cryptocurrency research team, talked on behalf of the entity.
Bank of America said that the United States could have its CBDC between 2025 and 2030. Therefore, it might lag a little behind other world powers like China that have progressed in regulating their centralized digital currencies. The banking institution considers that CBDCs are an inevitable evolution within the economy of a State.
In addition, it will be necessary to wait while the implementation of a CBDC for the digital dollar progresses. That has led the Bank of America to say stablecoins issued by private entities may grow strongly within the United States. At the moment, several financial entities in the country could be getting ready to launch their stablecoins.
Despite that initiative, regulations may hamper the growth of those stablecoins. A bill announced in December 2020 could ban them within the United States, excepting those issued by federal banks. However, several movements occurred throughout 2021 to push for improvements in regulations rather than prohibiting their use within the country.
The position of Bank of America on CBDCs and stablecoins is direct. Concerning Bitcoin (BTC), the bank described in March 2021 the pioneering cryptocurrency as impractical and volatile.
The United States Will Not Ban Bitcoin to Launch Its CBDC
The Chinese government applied an aggressive strategy to ban Bitcoin in the territory for launching the digital yuan. They persecuted miners, alleging that their activity harmed the environment, and they even outlawed all transactions with the crypto asset in the country.
The Fed does not show a closing position regarding the use of Bitcoin and other cryptocurrencies within the United States. However, they are concerned about the possible impact of the use of CBDCs. Besides, the current chairman of the Federal Reserve, Jerome Powell, has stated that the country does not intend to ban decentralized crypto assets.
The authorities have not shown any intention to prohibit them, but companies in the cryptocurrency sector are in legal limbo due to the lack of clear regulations.
The above has forced different companies to exert pressure in the corresponding areas. In that way, they seek to define the regulatory framework for Bitcoin and cryptocurrencies.
The opportunities offered by digital means of payment have made CBDCs and stablecoins relevant among financial institutions. However, the authorities need to establish clear regulations to allow companies of that sector to work without banning decentralized cryptocurrencies.
By Alexander Salazar
