BitDigest June 19 · Issue #683
- Crypto prices inch down over 24-hours and report negative returns for the week
- The Bank of Thailand announces plans to begin developing a CBDC
- The Basel Committee is considering to install new capital requirements for banks holding digital assets
Time to Consider Implementation Plan for Digital Dollar
Our investment team has been debating the evolution of central bank digital currencies for the past couple of year. Recently the discussion has turned to how the US can quickly respond to China’s DCEP. We all know that the US has access to existing technologies from companies like PayPal/Venmo and Square, but Fed Chairman Powell’s recent statement that he would not want to issue a CBDC in cooperation with a private company hinders these options.
We believe the question is not how the government will develop the technology, it could always fork an existing cryptocurrency, but how will the government roll out the platform and educate the users. This really becomes a question of implementation and adoption. While the People’s Bank of China already has a head start, we cannot over look the added advantage they have by having a digitally native population. Unlike the US where only 12% of Americans use platforms like Venmo, 72% of the Chinese population is active on WeChat.
I am very pleased that Chairman Powell wants the US to be a leader among sovereign nations looking to develop their own digital currencies, but I am concerned this will be a much longer process than many of us are imagining and once introduced, I expect us to be running a dual system of paper and digital dollars for a very long time.
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