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תאריך: מאי 1, 2022 | קטגוריות: קידום אתרים

Technology continues to revolutionize the lives and work of individuals, central banks around world are working to develop digital currencies. The United States is the latest nation to declare "urgency," in its attempt to find a digital copy of its currency through CBDC, also known as a Central Bank Digital Currency or CBDC.

Part of President Joe Biden's executive order on digital assets that was issued on Wednesday includes "placing the highest priority on the research and development of a potential United States CBDC, should issuance be deemed to be in the national interest," in accordance with a fact sheet that was released by the White House.
China, the world's second-largest economy by gross domestic product (GDP), soft-launched its digital currency renminbi in January. CBDC has already surpassed 100 million users. Kristalina Georgieva (International Monetary Fund's director of direct) said that CBDCs have been explored in some way by about 100 countries during her address to the Atlantic Council think tank last week.
Georgieva declared, "We have advanced beyond conceptual discussions of CBDCs. We are now in a stage of testing.” "Central banks are putting their hands up and getting acquainted with the bits and bytes of digital currency."
David Yermack, the finance department chair at New York University's Stern School of Business, said to CNN Business that it is now "inevitable that all over the world will be issuing money in this way." In the United States, the pandemic propelled demand for cashless payment methods and many Main Street investors have embraced cryptocurrencies like bitcoin and ethereum, placing pressure on the federal government not to fall behind on the trend.
With the Biden administration now throwing new weight behind developing new ways to use Americans with money, here's what to know about CBDC.
What is the Central Bank Digital Currency and how does it function?
CBDCs are defined by the Federal Reserve as "a digital currency that is freely available to the public". A key difference from traditional forms of digital cash in the form of a bank account or payment apps is that the money will be a responsibility to the Fed and not commercial banks — thus the designation "central bank money." It would therefore be the actual US dollar in digital form, not an investment in a cryptocurrency, or a holding in your PayPal.
There are many opinions on how and what this would appear like, but it may in theory reduce the need of third-party processors when it comes to transferring money.
cardano price spoke with Sarah Hammer, the managing Director of the Stevens Center for Innovation in Finance (Wharton School at the University of Penn). It would be calculated on the fiat currency in the country. This means it will be dependent on the currency supply. Once it is in place, it could be executed using approved private sector entities or a database maintained by the government.
Yermack, a long-term student of the growing popularity of digital currencies, claimed that CBDC CBDC will "actually operate an awful much like Bitcoin and other cryptocurrencies."
"You'd have a network, likely owned by the general public, in which users can pay each other directly, and without having to pass through a third party," Yermack explained.
Hammer believes that the most crucial tech decision for policymakers is whether or a US central bank's digital currency operates on Blockchain technology, the technology underpinning Bitcoin. It would put the government's weight behind the emerging tech.
Hammer stated that it could be operated via central databases or distributed ledger technology like the Blockchain.
The Federal Reserve Bank of Boston released last month joint research on "Project Hamilton" an CBDC experiment. According to the statement of the Boston Fed, the blockchain technology was utilized and produced the "one code base capable handling 1.7million transactions per second" result. This was far above the threshold of 100,000 transactions per second, which the researchers initially set to achieve. Project Hamilton is a program which focuses on the development of technology rather than the creation of an American-friendly CBDC.
Yermack however stated that it is likely that the Fed will take what they are doing and try to increase the size of their operation.
The digital currency in China is, however, does not rely with blockchain technology. The digital yuan is designed to replace cash-based payments. It is accessible through a government-backed application and Tencent's WeChat. It makes use of the technology infrastructure, which is utilized by approved Chinese commercial as well as online banks and payment platforms. It's issued by the People's Bank of China.
What are the potential risks and benefits that could be averted?
The CBDC could provide consumers with the security, affordability, and efficient alternative to current options. Hammer says that CBDC could help reduce the problem of cash shortages and also reduce fraud. It could also make it simpler to collect taxes or distribute government funds.
"There are some advantages for having a central bank's digital currency," she stated in announcing that they can reach Americans without bank accounts.
Yermack warned that there are the possibility of cybersecurity concerns, technological barriers, privacy threats and security issues. https://controlc.com/6b00f80e are also concerned about the possibility that it will take over work done by credit markets and commercial banks.
In the January report in January, the Fed warned of cybersecurity threats. "Any CBDC infrastructure that is dedicated to this purpose will need to be highly resistant to attacks of this kind. The operators of CBDC infrastructure must remain vigilant as bad actors use more sophisticated techniques and methods."
A CBDC could also threaten the independence and bring up many new questions regarding policy.
"The possibility of political abuse is very high," Yermack said. "If the Federal Reserve were given this power, then the Federal Reserve would need more protections from the political world than is that is currently in place."
Yermack acknowledges that CBDCs are not easy to implement. CBDC is a process that requires the development of a "thoughtful political strategy" and the need for a "transition period" in order to let nations explore it over the next decade. He believes there are still "many good reasons" for doing this.
Yermack said, "Take into account the fact that people don't really prefer spending money — their preferences are forcing governments to move in the same direction as people,"

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