US Federal Commission Claims Cryptocurrencies Can Boost Economy, Will This Result in a Bullish Trend?

US Federal Commission Claims Cryptocurrencies Can Boost Economy, Will This Result in a Bullish Trend?

Discussions are underway to enable the existence of digital currencies in the American economy. The proposal is to achieve this by linking cryptocurrencies to the US dollar. This contemplation took place on Tuesday at a meeting held by the US Fed.

At the meeting, a panel of speakers stated that the status of the dollar will gain more strength with crypto assets in the US economy. Moreover, this will also give a boost to the digital currency industry.

The dollar’s strength could be enhanced through cryptocurrencies

The current state of cryptocurrencies still presents a certain level of uneasiness in the minds of cryptocurrency traders. Many still doubt that the market will take a bullish turn sooner rather than later. With that in mind, the panelists thought it wise to mention incorporating these digital currencies into the US dollar.

They believe it will improve the status of the dollar and the cryptocurrency community. The panel added that the increase will be possible as cryptocurrency traders continue to use these digital currencies, especially CBDC. They stated that changes in the dollar will be evident in its role in the international market.

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According to the chairman of the Fed, Jerome H. Powell, there is a tendency to increase the price of altcoins and stablecoins. He made this statement last month. This reveals that a move to peg cryptocurrencies to the US dollar was in the works. He added that due to the rapid growth of these digital assets, the Federal Reserve is now evaluating the use of CBDCs.

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The idea behind the assessment is to know whether a CBDC would stand the test of efficiency and security of domestic payments. In addition, according to the US Fed’s white paper, CBDC could contribute positively to maintaining the international status of the US dollar.

CBDC as an improvement on the US dollar

Going further in the discussions between the panelists, specific issues were addressed. One of them was whether crypto technology can positively affect the role of the dollar. They concluded that the technological aspect of these digital currencies alone cannot improve the ecosystem of this globally recognized currency.

This answer had reason to support it; the ecosystem of these cryptocurrencies revolves only around retail investors. Also, there were steps to migrate towards institutional investors, but they failed due to lack of regulatory framework.

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As a result, US CBDC will concentrate on retail sectors. This prevents any threat to the US dollar while maintaining its international status. However, they also stated that there are still limitations to the ability to use cross-border CBDCs.

Featured image from iStockPhoto, Charts from TradingView.com



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