The growing interest of nations in the development and research of Central Bank Digital Currency (CBDC) is generating mixed reactions globally, and U.S. Federal Reserve Governor Michelle Bowman is not excluded, who recently expressed her opinion about a possible U.S. CBDC, stating that the risks associated with it far outweigh the benefits.

Bowman's sentiment on a U.S. CBDC is that it may have some uses in international payments processing and settling of certain financial market transactions, yet the possible impact of its risks makes it almost impossible to justify its use for other purposes. Bowman also argued that sponsoring a U.S. CBDC wouldn't be the all-in-one solution its advocates have claimed, as the FedNow payments solution can also offer fast, frictionless, and cost effective payment system.

Part of the controversy surrounding the introduction of a U.S. CBDC is the fear its creation could have a negative impact on consumer privacy and banking system, and its chances of being used as a tool for financial inclusion despite being low. Furthermore, Rep. Tom Emmer proposed a bill this Febuary to make the Federal Reserve's issuance of a CBDC possible only for wholesale uses.

This indecision regarding the CBDC in the U.S. was backed up by a recent proposed draft bill by the House Financial Services Committee, which seeks to gain insight on the potential of a digital dollar and the consequences of its implementation. However, it remains uncertain on if or when the digital currency can emerge in the country.



Other News from Today