In a surprising development, a panel of speakers hosted by the U.S. Federal Reserve had on Tuesday gave a big boost for the cause of cryptocurrencies. They recommended that crypto assets be allowed to flourish in the U.S. economy as it would further strengthen the dollar’s status. The Fed cryptocurrencies discussion gave rise to some interesting observations.
Crypto Assets Could Help Strengthen Dollar
While the cryptocurrency ecosystem traverses through a historical low, the panel’s comments come as a welcome move for the crypto community. The big question in crypto traders mind is will crypto recover from the current lows in near future. The panel members said the usage of cryptocurrencies, especially the CBDCs, could strengthen U.S. dollar’s role in the international market. On the regulatory side, the services offered around crypto assets should be linked to the dollar, they suggested.
“Digital assets could actually reinforce the dollar’s role in the international market over the medium run. This could be done if new sets of services structured around these assets are linked to the dollar.”
Last month, Fed Chair Jerome Powell spoke about the rapid growth in cryptocurrencies and stablecoins. In light of the tremendous growth in crypto-assets and stablecoins, the Fed is examining the usage of CBDCs, he said.
The Fed is looking at whether a CBDC would improve on an already safe and efficient domestic payments system. As the Fed’s white paper notes, a U.S. CBDC could also potentially help maintain the dollar’s international standing, he added.