Revolution in the financial system: A new era of central bank-issued digital currencies
Digital Currencies Issued by Central Banks – Revolution in the Financial System
Central banks worldwide are intensively developing Central Bank Digital Currencies (CBDCs), which are digital equivalents of traditional national currencies. Currently, they are conducting tests and pilots aimed at exploring the potential applications of these new forms of money, both in domestic and international markets.
Issues Related to CBDCs
Despite ongoing progress, there are still many uncertainties surrounding CBDCs. They concern both how they function and their potential uses. However, experts emphasize that the development of CBDCs can bring benefits such as cost reduction and increased speed of international transactions. Additionally, it may reduce the dependency of many countries on the dominant US dollar.
The Role of the US Dollar in the International Financial System
The dominance of the US dollar in global trade has significant consequences not only for the USA but also for other countries. For the United States, this means, among other things, lower costs related to foreign debt and transactions of American companies internationally.
Challenges for the US Dollar
However, the increasing use of sanctions by the USA, including freezing Russia’s foreign exchange reserves, raises doubts about the future role of the dollar in the international financial system. There is a real threat to the dollar’s position, especially in the context of the possibility of direct currency exchange between two countries, bypassing the role of the US dollar.
Introducing a US CBDC
Facing these challenges, experts point out that the USA should consider introducing their own CBDC, focusing on a wholesale version for international use. This is a crucial step to maintain the dollar’s position in the international payment system, especially in the face of competition from other digital currencies, such as the Chinese e-CNY.
Combatting the Global Revolution
The development of China’s digital yuan, the e-CNY, poses another challenge to the US dollar. The potential introduction of the e-CNY into the international market could significantly reduce the dollar’s importance in global trade transactions. Therefore, the USA should actively engage in this technological revolution to preserve its position in international trade and compete with China in the field of digital currencies.
In conclusion, the development of central bank-issued digital currencies is a significant step in the evolution of the financial system. For the USA and the US dollar, this is a challenge but also an opportunity to maintain relevance in global financial relations.
