Central bankers believe that CBDC will replace Tether’s stablecoin as they express optimism for digital currencies but it could take up to four years before this happens so let’s read more in the Tether news today.
ECB President Christine Lagarde is positive on the launch of central bank digital currencies but in a few years. The US Fed Chairman and the governor of BoE said that they are also analyzing the cost and the benefits of the payment system. Speaking of the annual ECB forum about central banking, the heads of three central banks said that they believe in CBDCs and are exploring the idea of launching one. Some even predicted the CBDC will replace Tether’s stablecoin and other stablecoins as well. The Chairman of the US Federal Reserve Jerome Powell said that it is more important to “get it right as opposed to being the first.” However, Powell noted:
“We have been actively participating with Andrew and Christine, and other central banks at the BIS to look at the benefits of CBDC.”
The leaders of the central banks recognized the rise in digital payments in the past decade and its acceleration because of the pandemic to which Lagarde said:
“A lot of digital payments are accelerating, pushing us in the direction of exploring alternative modes of payments, and there will be a transformation that will be beneficial.”
Lagarde was motivated enough to launch a CBDC to facilitate “faster, cheaper, and secure cross-border payments” which are quite “laborious” to her at the moment. On the other hand, Powell’s primary focus is maintaining the US dollar position as the reserve currency of the world. therefore, he recommended a cautious approach to evaluate the monetary and fiscal changes for a CBDC launch.
Andrew Bailey, the governor of Bank of England said that a CBDC will replace private stablecoins like Libra, Tether, and others, as people will be more confident in storing and spending CBDCs. Currently, ECB leads among the three banks in their CBDC efforts as Lagarde revisited her statement from the past that CBDC will not substitute cash but they will complement them. Starting in October, the ECB sought public comments on the CBDC plans which have a deadline in mid-January. Lagarde is optimistic that CBDC will come but it could take up to 4 hours to do so.
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