Banks of America’ strategist believes Stabelcoins adoption will surge because US Fed Res delay on CBDC
Bank of America’s report noted that the US federal reserve will move toward the adoption of CBDC but late.
A few days ago, the US federal reserve published its research development paper on the Central Bank Digital Currency (CBDCs). Through the published research paper, Fed admitted that there are many types of benefits to using CBDC like efficient payment system, real-time payment system, direct to customer services.
But on the other side, Fed noted that there are many types of risks associated with the CBDC adoption like the privacy of the user and control on the bad actor in CBDC users.
According to a recent Bloomberg report, Andrew Moss and Alkesh Shah, crypto strategists at Bank of America, stated that the US will move toward the adoption of CBDC but delay in the development and adoption of CBDC will end up in better results for private companies, which are operating their stable coins.
Analysis wrote that people and companies will move toward the adoption and different types of the use case the of dollar-pegged stable coins continuously and also lots of more people will enter in the use cases. So overall it will benefit stable coins companies like Tether, Circle, etc.
“We expect stablecoin adoption and use for payments to increase significantly over the next several years as financial institutions explore digital asset custody and trading solutions and as payments companies incorporate blockchain technology into their platforms.”
Entry of CBDCs concept
Central Bank Digital Currency (CBDCs) are just like stable coins but here CBDCs are more reliable because of the support of direct government Central Banks. But the liabilities of the stable coins remain under the custody of private companies.
In 2020 Bahamas launched its own Digital Currency, Sand Dollar. And this was the first time in the world, that we saw a government centred digital currency.
After experimenting in the Bahamas, the concept of CBDCs was entered.
Right now more than 91 Banks are currently working on CBDCs research and development. And 11 Countries have been reached in the CBDCs pilot phase.
