Fed banks in New York and Boston are working on U.S. CBDC.The United States is to introduce its Central Bank Digital Currency (CBDC), and even before its release, the decision is facing heat on multiple fronts. The Governor of Florida, Ron Desantis, took another swing on May 2, 2023, against U.S. digital dollar and defended the crypto industry.
Ron Desantis Re-opened Front Against CBDCs
Speaking at a press conference titled “Government of Laws, Not Woke Politics,” Desantis, referring to the recent slew of attacks on the crypto industry, argued that “They don’t like crypto because they can’t control crypto.” he added that they want to discard crypto.
He was presumably referring to Democrats in Washington, D.C., as they and the Republicans gave the crypto issue more importance than it deserves. Further suggesting that his political opponents are working towards creating CBDC, which would supposedly be issued, backed, and tracked by the U.S. Government.
On March 21, 2023, Ron Desantis proposed legislation banning CBDCs that the U.S. Federal Reserve might introduce or create by any foreign government from Florida. With this step, the Sunshine State outlawed the technology entirely from being used as a currency in Florida.
He feels the danger with the proposed CBDC is that issuers want to make them the sole currency and are willing to put everything in them. That’s wrong fundamentally. Hence the agenda behind opposing was for everyone to recognize the danger.
The press conference focused on bills opposing the “Environmental, Social, and Governance” ESG policies. Such policies emerge from the urge to introduce factors beyond pure finance for evaluating a company or organization. Instead, environmental and community impacts are diagnosed.
“So-called ‘ESG’ policies represent an attempt to impose through the economy, an ideological agenda, […] and prioritize woke ideas and virtue signaling over commonsense financial practices.” – Desantis.
U.S. CBDC’s Current Status
The United States is actively exploring the possibilities of CBDC and might launch its own very soon. However, the current status is under development. Federal Reserve Bank of New York works closely with the Bank of International Settlement (BIS) to understand the critical trends and financial technology required for the digital dollar under “Project Cedar.”
In collaboration with the Massachusetts Institute of Technology (MIT), Boston Fed is working on a Digital Currency Initiative called “Project Hamilton.” This would explore the transactional and other possibilities of digital dollars.
The initial phase of Project Hamilton indicated that the processor could settle between 170,000 to 1.7 Million transactions per second. Also, 99% of transactions were completed in under five seconds. In addition to this government-led project, multiple private entities are exploiting different digital dollar models.
The proposed CBDC would have both retail and wholesale use cases, its architecture would be intermediate, and the details about the underlying technology, partnerships, and cross-border projects are, as of now, undecided.
Until December 2022, all the G7 economies are exploring CBDC’s possibilities and are in development. Among the group of G20 countries, 18 are now in the advanced stages of developing their CBDCs.
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