The Us Treasury Pointed To The Advantages Of Cbdc For Financial StabilityAdmin
The digital dollar can strengthen financial stability. Analysts of the Office of Financial Research under the US Treasury Department (OFR) came to this conclusion.
Experts considered exaggerated fears about the possibility of a “ranking panic “in the event of a crisis due to the launch of the digital dollar. Earlier, the FRS mentioned such risks as a negative consequence of the appearance of CBDC in its report.
According to OFR analysts, the digital dollar will provide the authorities with an early warning system for problems in the financial system. Such a signal will be an active conversion of funds into CBDC.
“Monitoring will allow supervisors to more quickly determine when a banking panic begins and respond to threats posed by troubled banks,” the document says.
According to experts, such knowledge can reduce the desire of large investors of the institution to initiate this process.
Analysts also pointed to a decrease in incentives for clients of an “eak bank” to transfer funds to a more reliable institution “during calm times.”This will be possible due to the more conservative policy of financial institutions compared to the situation before the advent of the CBDC.
“We view [the OFR report] as a tool that digital dollar advocates can use to inform their launch plans, “wrote Jareth Seiberg, an analyst at Cowen Group.
The conclusions from the report are consistent with the latest comments by Fed Vice President Lael Brainard, who saw the CBDC as a neutral, trusted settlement layer in the future crypto-financial system.
Recall that in June 2022, the BIS called national digital currencies the basis of future monetary systems.
Earlier, at a congressional hearing, the head of the Fed, Jerome Powell, announced the preparation of a strategy for implementing CBDC.