{"id":344192,"date":"2021-09-25T16:34:00","date_gmt":"2021-09-25T13:34:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/its-now-or-never-the-us-has-to-prepare-itself-for-digital-currency\/"},"modified":"2021-09-25T16:34:00","modified_gmt":"2021-09-25T13:34:00","slug":"its-now-or-never-the-us-has-to-prepare-itself-for-digital-currency","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/its-now-or-never-the-us-has-to-prepare-itself-for-digital-currency\/","title":{"rendered":"# It&#8217;s now or never \u2014 The US has to prepare itself for digital currency"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3872eb5ce82\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3872eb5ce82\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/its-now-or-never-the-us-has-to-prepare-itself-for-digital-currency\/#CBDC_A_global_perspective\" >CBDC: A global perspective<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/its-now-or-never-the-us-has-to-prepare-itself-for-digital-currency\/#Is_America_ready_to_enter_the_world_of_CBDC\" >Is America ready to enter the world of CBDC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/its-now-or-never-the-us-has-to-prepare-itself-for-digital-currency\/#Possible_reasons_behind_Americas_laid-back_attitude_towards_digital_currency\" >Possible reasons behind America&#8217;s laid-back attitude towards digital currency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/its-now-or-never-the-us-has-to-prepare-itself-for-digital-currency\/#What_can_the_US_possibly_do\" >What can the U.S. possibly do?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/its-now-or-never-the-us-has-to-prepare-itself-for-digital-currency\/#Final_notes\" >Final notes<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># It&#8217;s now or never \u2014 The US has to prepare itself for digital currency <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDkvYTZiNTZmNTktN2QxNC00OGRlLWFmOTUtNjJlNTYyOGYxZWEwLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>Welcome to the world of central bank digital currency, or CBDC, where big countries like China and small countries like the Bahamas are trying to mark their presence. It\u2019s a world where 86% of the world\u2019s central banks are trying to create digital currencies. Almost 60% of them are working on the concept and 14% have already introduced a pilot program.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Did CBDCs affect the crypto space in 2020, and what\u2019s next in 2021? Experts answer<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"CBDC_A_global_perspective\"><\/span>CBDC: A global perspective<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A CBDC is the digital version of a national currency that can be exchanged throughout the world. Unlike a national currency, you can keep a digital currency on your smartphone to buy whatever you want.<\/p>\n<p>Five countries have already introduced their digital currency. The Atlantic Council <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.atlanticcouncil.org\/issue\/digital-currencies\/\">believes<\/a> that around 81 countries (contributing 90% of the world\u2019s GDP) have already started researching digital currency. And this is just the beginning.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>The CBDC promised land: As some governments falter, others press on<\/em><\/strong><\/p>\n<p>According to a Bank for International Settlements (BIS) survey published back in January, there will be a boom in digital currency in the next few years. Per BIS, countries comprising one-fifth of the world\u2019s population will launch a digital currency soon.<\/p>\n<p>China is at the top of the league right now. They have already <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-07-16\/china-s-digital-yuan-trial-reaches-5-3-billion-in-transactions\">made<\/a> over $5 billion worth of transactions with its CBDC, the digital yuan. Some people fear this will help China get an edge over the U.S. dollar\u2019s status.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>How the digital yuan stablecoin impacts crypto in China: Experts answer<\/em><\/strong><\/p>\n<p>But how can you use CBDCs? Well, there are various ways. They can buy necessities, such as food and medical supplies. However, it\u2019s best if the digital currency is not used for buying alcohol or cigarettes. Digital currency can also come in handy during a pandemic. It can deliver government aid fast through digital wallets. It can also help the government stop malpractice.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_America_ready_to_enter_the_world_of_CBDC\"><\/span>Is America ready to enter the world of CBDC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The U.S. Federal Reserve is still skeptical about the efficacy of central bank digital currencies. They are still years away from developing their own digital currency. Meanwhile, according to a Bank of America <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnbc.com\/2021\/04\/19\/central-bank-digital-currency-is-the-next-major-financial-disruptor.html\">report<\/a>, digital currency would make the U.S. dollar \u201cremain highly competitive\u2026relative to other currencies.\u201d<\/p>\n<p>The U.S. House Committee on Financial Services <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/financialservices.house.gov\/calendar\/eventsingle.aspx?EventID=408111\">held<\/a> a hearing on the benefits and drawbacks of central bank digital currencies. Many people who attended the hearing, including Julia Coronado of MacroPolicy Perspectives, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.piie.com\/publications\/policy-briefs\/securing-macroeconomic-and-monetary-stability-federal-reserve-backed\">expressed<\/a> their opinion that the U.S. has to be more serious and take a leadership role in CBDC.<\/p>\n<p>China is already leading the race and other countries are also making steady progress. If America continues its laid-back attitude regarding digital currency, it will lose the chance to decide the future of digital currency.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Possible_reasons_behind_Americas_laid-back_attitude_towards_digital_currency\"><\/span>Possible reasons behind America&#8217;s laid-back attitude towards digital currency<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>One possible reason America is not taking proactive steps regarding digital currency is because the U.S. dollar still reigns supreme. But what America does not understand is that CBDCs can remove the U.S. dollar from its<em> numero uno<\/em> position as the global reserve currency in the future.<\/p>\n<p>A digital currency would eliminate hurdles for countries making financial transactions with each other directly. They wouldn\u2019t have to depend on the U.S. dollar anymore. One reason the U.S. dollar is dominating the world is because it is a reserve currency. People use it for convenience. But with the emergence of digital currency, these people can enact a direct settlement between trade pairs.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>China\u2019s CBDC is about domestic dominance, not beating the dollar<\/em><\/strong><\/p>\n<p>The U.S. dollar is an integral part of America\u2019s foreign policy. The federal government can bar sanctioned countries from the dollar-based system.<\/p>\n<p>Now, everything depends upon the United States. If the country doesn&#8217;t introduce its own CBDC, it may not get much information on cross-border transactions in the future. If the other countries use digital currencies for transactions, they wouldn\u2019t need to use the Society for Worldwide Interbank Financial Telecommunication network, which America can supervise.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_can_the_US_possibly_do\"><\/span>What can the U.S. possibly do?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There is one disadvantage of digital currency, and that is the lack of privacy. Many Americans may not like the fact that the government can easily monitor transactions made with digital money. The U.S. government can play a significant role in alleviating this concern. It can develop a digital currency that won\u2019t lead to privacy infringement. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.cnn.com\/2021\/08\/13\/perspectives\/central-bank-digital-currencies\/index.html\">According<\/a> to the co-founder of the Digital Dollar Project, Chris Giancarlo:<\/p>\n<blockquote><p>\u201cIf this is going to be the tech of the future, we want to make sure the U.S. brings democratic values to bear.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Final_notes\"><\/span>Final notes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A close inspection of the current scenario shows that the digital currency is here to stay. Digital currency can help central banks to coordinate with people directly. This is extremely helpful during times of crisis.<\/p>\n<p>The widespread use of digital currency may cut down the operating cost of the global financial industry. It may become the most convenient way to make financial transactions and push us toward a cashless society.<\/p>\n<p>Will it eliminate cash completely? Well, it\u2019s too early to predict, since cash is still the most private form of money. Central banks are not recommending a total elimination of cash.<\/p>\n<p>Will it replace Bitcoin (BTC) or other cryptocurrencies? The fundamental difference between CBDCs and cryptocurrency is that the first one is digital government currency, and the second one is a nongovernmental digital currency. As of now, CBDCs are less likely to replace cryptocurrency, which is convenient for private transactions (although it is unregulated and vulnerable to hackers).<\/p>\n<p>Next comes the next big question: What about America\u2019s place in the CBDC world? The answer is simple. If America is still not ready for digital currency, it will stay on the sidelines. It will lose a chance to create a digital currency that is democratic and has a strong focus on privacy. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/time.com\/6084146\/china-digital-rmb-currency\/\">According<\/a> to Michael Sung of the Fudan Fanhai Fintech Research Center in Shanghai: \u201cYou\u2019re going to see a massive transformation of the international monetary system.\u201d <\/p>\n<p>If this is true and there is widespread use of digital currency, the value of the U.S. dollar as a global currency will decrease. If America acts wisely and develops digital currency, it can bring around 14 million unbanked U.S. adults into the financial system.<\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Lyle Solomon<\/strong> is a principal attorney for the Oak View Law Group in California, where he specializes in consumer bankruptcy. In addition to his extensive litigation experience, Solomon has written several articles on financial well-being.<\/div>\n<\/div>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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It\u2019s a world where 86% of the world\u2019s central banks are&#8230;<\/p>\n","protected":false},"author":1,"featured_media":344193,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDkvYTZiNTZmNTktN2QxNC00OGRlLWFmOTUtNjJlNTYyOGYxZWEwLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[75062,74862,75046,74863,74355,4973,67874],"class_list":["post-344192","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bis","tag-bitcoin","tag-cbdc","tag-cryptocurrencies","tag-adoption","tag-china","tag-united-states"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/344192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=344192"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/344192\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/344193"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=344192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=344192"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=344192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}