The acronym CBDC stands for Central Bank Digital Currency, and it’s something that has been talked about recently as the Federal Reserve assesses the pro’s and con’s of using a digital currency. This is a real possibility, and it’s something you need to be aware of, even though the U.S. has a very efficient and safe domestic payments system in place.
The CBDC could be summed up in being a digital liability of a central bank that is also available to the public. Right now, in the USA, the only kind of bank money available is through Federal Reserve notes, (physical currency like the U.S. Dollar). Launching CBDC would mean that the general public would be able to make digital payments. With CBDC being a liability to the Federal Reserve, this would make the CBDC the most safe digital asset that the general public could get their hands on without any liquidity risk.
Will CBDC Actually Happen?
As mentioned, this is all something being studied at the moment. This won’t be an overnight process, and you can bet that it will be kicked around quite a bit as they assess if this is the right move at this point in time. The Federal Reserve will definitely be speaking to experts all around the digital currency sphere as well as economists who will shed light on how this may affect our current currency system.
Stay tuned, I feel this topic will gain a lot of momentum as the economy continues to spin out of control.
Speaking of that, I recently wrote why inflation is the cause for the banking crisis. Make sure to check that out as I offer some alternative investment ideas that could help you survive this turbulence.
Would you be in support of a digital currency? Curious to hear anyone’s thoughts, please get in touch if you feel like sharing.