kmiainfo: Will the digital dollar end the era of cryptocurrency? Will the digital dollar end the era of cryptocurrency?

Will the digital dollar end the era of cryptocurrency?

Will the digital dollar end the era of cryptocurrency? The Federal Reserve’s report on the possibility of issuing a digital dollar, at a time when about 90 other countries are considering ways to digitize their currencies, has opened the door to speculation that the storm could not only end the era of cryptocurrencies, but also reduce the need for banks. In January of 2009, while the world was thick with financial losses that swept the whole world after the economic crisis that struck America in 2008, a new decentralized digital currency was born for the post-crisis era, and Bitcoin promised to be the financial alternative to the dominant financial system for those who They suddenly found themselves suspicious of the traditional banking institutions of decades past. Since its launch more than a decade ago, Bitcoin and the rest of the other digital currencies have not only dominated a financial industry worth more than 2.22 trillion dollars, but it is no longer a secret fad shrouded in mystery and has become, for some, a currency that represents the future of money within the utopia where cryptography replaces traditional currencies. This is after El Salvador made history by becoming the first country in the world to adopt Bitcoin as a legal currency last September. There is no doubt that the rise of the huge global demand for cryptocurrencies has put governments on alert, and made them review their options to offer their own digital currencies issued by their central banks, as countries such as China and Sweden have already started working on digitizing their currencies, while the US Federal Reserve is still not Support or oppose the central bank digital currency. Digital dollar On Thursday, the US Federal Reserve released a long-awaited report on the digital dollar outlining the potential benefits and risks of fully digitizing the US dollar, serving as the first step in a process that could lead to Congress taking action that could help build momentum for legislation that would authorize the Federal Reserve. Directly in designing a digital currency system. The new report, which has so far outlined the pros and cons of the central bank’s digital currency, indicated that the creation of a digital dollar backed by the United States government would lead to faster transfers and receipt of funds, as well as provide greater access to it than the current banking system, which is Which poses a real threat to the current banking system, along with the cryptocurrency market, which is experiencing an already harsh winter. However, the creation of a digital dollar would be a huge shift in the size of the US government's role in the country's financial resources and abroad, as the US government would continue to support the "dominant international role of the US dollar," according to the research paper. A central bank digital currency would be a major digital upgrade to existing currency formats. Besides the potential downsides that could make commercial banks less attractive to consumers, the digital dollar could also affect the Fed's ability to influence the financial system. "Crypto Winter" The report issued by the US Federal Reserve, which is an advanced step to study the possibility of issuing a digital dollar, came at a time when about 90 other countries are studying ways to digitize their currencies, according to Reuters. While the European Central Bank studies the possibility of creating a digital euro, and China is testing the digital yuan it has been working on since 2014, the United States, the world's largest economy, is considering the possibility of digitizing its dollar, which dominates global trade and savings. These digital steps, along with tighter monetary policies and other political fluctuations negatively affecting cryptocurrencies, most recently in Kazakhstan which has a monopoly over 18% of bitcoin production, prompted UBS to publish a research paper on January 14. This January, warning of a second “crypto winter” that cryptocurrencies may witness, which witnessed its first winter in 2018, when Bitcoin and other cryptocurrencies fell by more than 75%, which took about three years to return to previous high levels compared to 2017. UBS also sees that cryptocurrencies rose relatively in 2021 due to abnormal monetary policies that flooded global markets with excess liquidity, which made Bitcoin and other cryptocurrencies to serve as investment ports that protect consumers from the effects of inflation, but these currencies may lose Its attractiveness if central banks decide to raise interest rates to combat inflation that hits the largest global economies. Over the weekend, the bitcoin currency fell to about 34,000 dollars, achieving a loss of about 50%, after it reached its maximum value of nearly 69,000 dollars last November. And it's not just Bitcoin, other cryptocurrencies have experienced a similar decline. Reducing the dominance of banks A quick move towards a digital dollar would not only negatively affect the decentralized cryptocurrency market, but could also deal a severe blow to commercial banks and the banking system in general, because the central bank and the technology that will be used will be responsible for carrying out the traditional tasks that Commercial banks are currently doing it. In addition to the good advantages that digital currencies that will be issued by central banks, most notably the advantage of fast and easy transfers between individuals and companies (even across borders), in addition to greater access for people who do not have bank accounts and providing more security and confidence to consumers, especially since bankruptcy The lack of liquidity is less likely with the US government when compared to conventional banks. That is why the government will have to deal with the market's reaction to the US taking on a role traditionally served by commercial banks, and it will also require citizens to trust the government directly with all their financial information, although the latest report vaguely suggests that this concern can be mitigated by allowing Brokers are 'addressing privacy concerns' by utilizing existing tools.

Will the digital dollar end the era of cryptocurrency?

The Federal Reserve’s report on the possibility of issuing a digital dollar, at a time when about 90 other countries are considering ways to digitize their currencies, has opened the door to speculation that the storm could not only end the era of cryptocurrencies, but also reduce the need for banks.

In January of 2009, while the world was thick with financial losses that swept the whole world after the economic crisis that struck America in 2008, a new decentralized digital currency was born for the post-crisis era, and Bitcoin promised to be the financial alternative to the dominant financial system for those who They suddenly found themselves suspicious of the traditional banking institutions of decades past.

Since its launch more than a decade ago, Bitcoin and the rest of the other digital currencies have not only dominated a financial industry worth more than 2.22 trillion dollars, but it is no longer a secret fad shrouded in mystery and has become, for some, a currency that represents the future of money within the utopia where cryptography replaces traditional currencies. This is after El Salvador made history by becoming the first country in the world to adopt Bitcoin as a legal currency last September.

There is no doubt that the rise of the huge global demand for cryptocurrencies has put governments on alert, and made them review their options to offer their own digital currencies issued by their central banks, as countries such as China and Sweden have already started working on digitizing their currencies, while the US Federal Reserve is still not Support or oppose the central bank digital currency.

Digital dollar

On Thursday, the US Federal Reserve released a long-awaited report on the digital dollar outlining the potential benefits and risks of fully digitizing the US dollar, serving as the first step in a process that could lead to Congress taking action that could help build momentum for legislation that would authorize the Federal Reserve. Directly in designing a digital currency system.

The new report, which has so far outlined the pros and cons of the central bank’s digital currency, indicated that the creation of a digital dollar backed by the United States government would lead to faster transfers and receipt of funds, as well as provide greater access to it than the current banking system, which is Which poses a real threat to the current banking system, along with the cryptocurrency market, which is experiencing an already harsh winter.

However, the creation of a digital dollar would be a huge shift in the size of the US government's role in the country's financial resources and abroad, as the US government would continue to support the "dominant international role of the US dollar," according to the research paper. A central bank digital currency would be a major digital upgrade to existing currency formats.

Besides the potential downsides that could make commercial banks less attractive to consumers, the digital dollar could also affect the Fed's ability to influence the financial system.

"Crypto Winter"

The report issued by the US Federal Reserve, which is an advanced step to study the possibility of issuing a digital dollar, came at a time when about 90 other countries are studying ways to digitize their currencies, according to Reuters. While the European Central Bank studies the possibility of creating a digital euro, and China is testing the digital yuan it has been working on since 2014, the United States, the world's largest economy, is considering the possibility of digitizing its dollar, which dominates global trade and savings.

These digital steps, along with tighter monetary policies and other political fluctuations negatively affecting cryptocurrencies, most recently in Kazakhstan which has a monopoly over 18% of bitcoin production, prompted UBS to publish a research paper on January 14. This January, warning of a second “crypto winter” that cryptocurrencies may witness, which witnessed its first winter in 2018, when Bitcoin and other cryptocurrencies fell by more than 75%, which took about three years to return to previous high levels compared to 2017.

UBS also sees that cryptocurrencies rose relatively in 2021 due to abnormal monetary policies that flooded global markets with excess liquidity, which made Bitcoin and other cryptocurrencies to serve as investment ports that protect consumers from the effects of inflation, but these currencies may lose Its attractiveness if central banks decide to raise interest rates to combat inflation that hits the largest global economies.

Over the weekend, the bitcoin currency fell to about 34,000 dollars, achieving a loss of about 50%, after it reached its maximum value of nearly 69,000 dollars last November. And it's not just Bitcoin, other cryptocurrencies have experienced a similar decline.

Reducing the dominance of banks

A quick move towards a digital dollar would not only negatively affect the decentralized cryptocurrency market, but could also deal a severe blow to commercial banks and the banking system in general, because the central bank and the technology that will be used will be responsible for carrying out the traditional tasks that Commercial banks are currently doing it.

In addition to the good advantages that digital currencies that will be issued by central banks, most notably the advantage of fast and easy transfers between individuals and companies (even across borders), in addition to greater access for people who do not have bank accounts and providing more security and confidence to consumers, especially since bankruptcy The lack of liquidity is less likely with the US government when compared to conventional banks.

That is why the government will have to deal with the market's reaction to the US taking on a role traditionally served by commercial banks, and it will also require citizens to trust the government directly with all their financial information, although the latest report vaguely suggests that this concern can be mitigated by allowing Brokers are 'addressing privacy concerns' by utilizing existing tools.

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