Speaking of US views on central bank digital currencies (CBDCs), Fed Chairman Jerome Powell noted that the Chinese approach would not work in the United States. The Federal Reserve Chairman stressed that the U.S. will not rush its own digital currency project, despite China's rapid advances. He revealed that the CBDC approach taken by the Asian country will have no effect in the USA.See also: Bitcoin will save banks – Understand how
China's CBDC will not work in the US
With the topic of rapid expansion of central bank digital currencies in numerous countries, the world's largest economy has yet to make a definitive stand. Although the US dollar remains the main reserve currency, the nation's position can be challenged if it falls behind in this regard.
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However, Federal Reserve Chairman Jerome Powell stressed once again that the United States cannot afford to rush the bill. In addition, he doubled in an earlier statement indicating that the country has a responsibility to "get it right" instead of "quick." United States, as the two countries are very different and require different approaches:
“The currency being used in China is not the one that would work here. It is one that really allows the government to see all payments for which it is used in real time. ”
Powell also reported that the US central bank is in a reserve position with respect to a possible CBDC. In his words, the institution needs to become familiar with the technology behind the project. The final product must be understandable to American citizens and also to people in other countries who depend on the dollar.
China's approach to its CBDC
While the United States remains stagnant, China is already running pilot programs to analyze the digital yuan. More recent reports have even suggested that the world's second largest economy plans to allow athletes and tourists from abroad to use the Chinese digital currency during the Beijing Winter Olympics in 2022. Despite the Chinese advance in the digital currency world, some market officials shared Jerome Powell's view that the race for the digital yuan may not deliver the expected results. Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto, commented:
"You are looking at a currency that will essentially not be anonymous and will be strictly under state control."
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