In a paper reported on Monday, the bank’s crypto strategists Alkesh Shah and Andrew Moss stated that a digital USD is an inevitable progression of these digital currencies. They estimate that the service will be accessible between 2025 and 2030.
They consider a digital USD as necessary as it’ll be different from the present digital currency available to American citizens in that it’ll be a central bank liability. This might mean that the virtual USD wouldn’t have any liquidity concerns.
Stablecoins like Tether or USD Coin, both tethered to the USD, would “likely prosper” in the coming years if there isn’t a US CBDC, according to the analysts.
As banking firms seek digital assets custody and trade options and payments businesses integrate blockchain technology into their systems, they added, we predict stablecoin acceptance and utilization for transactions to rise dramatically over the coming years
The early delivery of cryptography specialists’ thoughts on the US CBDC indicates that the country laid its debut.
Bank of America’s Pro-Cryptocurrency Moves
Whenever it deals with cryptography trials and experiments, BofA has shown a positive attitude. In October last year, the bank initiated cryptocurrency research to increase institutional interest.
This ain’t only BTC anymore; it’s virtual assets, and it’s spawning an entire environment of new businesses, possibilities, and uses,” Candace Browning, head of worldwide research at BofA Securities, said to Bloomberg.
The study was released in conjunction with a paper that examined a variety of cryptocurrency use cases, like tokens, programs driven by CBDCs, NFTs, smart contracts, and stablecoins.
NFTs have also caught BofA’s attention due to their prospective applications. Anto Paroian, chief operating officer of cryptocurrency or digital assets hedge fund ARK36, said,
“It’s worth noting that the [study] specifically highlights NFTs as part of the present driving force of the digital assets market.”
The bank was also interested in the metaverse, describing it as a “huge opportunity” that would lead to broad cryptocurrency adoption.
The CBDC in the United States is Still Going Strong
The United States has been working relentlessly to join the CBDC. For example, the Federal Reserve recently released a highly anticipated digital currency paper that discussed the benefits and drawbacks of a CBDC but did not provide firm timetables.
In the paper, the government also states unequivocally that it won’t issue a digital USD anytime soon.
While several cryptocurrency aficionados applauded the news, lawmakers criticized the Fed’s CBDC efforts. In a Twitter post, Senator Cynthia Lummis of Texas, a leading proponent of digital currencies, said that she’s undecided about the necessity for a CBDC.
On 24th January, the Biden government announced that an executive order concerning a government-wide cryptocurrency tactic was being drafted.
A CBDC might have several benefits, including facilitating global payments and giving customers access to the financial system. Nonetheless, the Federal Reserve warned that a poorly built digital dollar might undermine institutions and raise privacy.
