Cryptocurrencies have always been a politically charged subject in the United States, if not the world. However, not every US official is on the other side of the fence. While people like Gary Gensler have actively spoken against cryptocurrencies and tried to halt innovation in the space, others have stood up for the benefits of crypto. In a recent virtual hearing of the Financial Services Committee, US Federal Reserve vice-chair Lael Brainard presented a written report on the possibilities and risks of CBDCs for the country’s economic future.
In her statement, Brainard said that we can envision a future where CBDCs and fiat money exists hand-in-hand. She took the example of how paper money and plastic money coexists today and does not seem to pose any problems. CBDCs are based on the underlying principles of crypto but are indeed very different from them. The central point of difference is that CBDCs would be centralized — something that goes against the chief motto of cryptocurrencies. At the same time, it’s tough to ignore the palpable benefits that CBDCs would offer, especially in cross-border transactions.
In a later Q&A session, Brainard said she’s in favor of strict regulations when it comes to CBDCs. Given the primary function of CBDCs in a centralized environment, there’s no doubt that would be heavily monitored and regulated. Brainard later added that CBDCs would help in bridging the gap between the fragmented economy of the United States and will be a vital tool for international transactions in the future.