Cryptocurrencies have been one of the hottest trends of the past year, and now that the Web3 economy is expanding, their relevance is greater than ever. From NFTs to DAOs and the Metaverse, a second layer of application for cryptocurrencies is being built actively. But all of this is decentralized, and private, after all, that’s the point? But what if the government adopted cryptocurrency? Would it even be possible? Well, if they did it wouldn’t exactly be called a crypto, but rather, a CBDC. According to Investopedia, a CBDC is simply an electronic record or digital token of a country’s official currency. As such, it is issued and regulated by the nation’s monetary authority or central bank.
The U. S’s current stance on CBDCs is undecided and leans more towards something that won’t’ happen. Nonetheless, the Feds have investigated it and drawn out some pros and cons. In the pro’s column they’ve said: “a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve and may result in faster payment options between countries”. On other hand, some of their downsides include maintaining financial stability, Americans’ privacy, and the government’s ability to combat illicit finance”. What do you think about the viability of a CBDC in the U.S, and if it was possible, would it be a good idea?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.