The financial technology industry is changing rapidly. Digital assets, key distributed technology, and central bank digital currencies are gaining momentum. The creation of multi-trillion dollar US central bank money has increased the demand for digital assets, especially for bitcoin (BTC).
Banks, brokers, commercial lenders, investment advisors, private equity funds, family offices, mutual funds, businessmen in the field of financial technology, legislators and individuals should note some developments in this area.
Old wine and new bottles
Use ledgers to track events and transactions of old origin. DLT and blockchain technology combine esteemed recording methods with new technologies, such as storing old wines in new bottles.
The main goal of DLT is to create records with records that need to be examined by multiple distributed parties in “real-time” mode, which greatly complicates the fake. A reliable broker is not necessary. DLT and blockchain technology is different in some ways. For example, blockchain technology is usually not permitted or available to the public, while DLT technology is permitted and not generally available. The potential benefits of DLT and blockchain technology connect many industries and many applications.
Reference of digital assets
Bitcoin and other digital assets, such as gold and other commodities, are commodities that people value in market transactions. Unlike gold, you can send or receive digital assets instantly to anyone or anywhere in the world.
The demand for digital assets like Bitcoin and CBDC, including the US dollar, reflects the changing needs and desires of computer professionals in the 21st century. Only some banks have accounts with the Federal Reserve. Digital dollars can change this by allowing or possibly requiring companies and individuals to open and maintain Federal Reserve accounts.
Congress and the Fed take digital dollars
Center members of Congress, especially Illinois Democrat Bill Foster and the French Republican Hill in Arkansas, are paying the Federal Reserve to develop digital dollars. In a letter to Federal Reserve Chairman Jay Powell on September 30, 2019, Foster and Hill posed some sensitive questions about digital dollars. They stressed that “by the way, the US dollar may be in long-term risk due to the widespread use of digital banknotes” and that “the use of digital assets may increasingly coincide with the use of banknotes in the future.”
President Powell replied on November 19, 2019 that the Federal Reserve will continue to review the US CBD, but this process will take some time and be carefully reviewed. He added that the incentives of other countries to implement the Convention on Biological Diversity, such as the lack of “fast and reliable digital payment systems”, are not particularly relevant to the United States.
Creates momentum for the digital dollar
In contrast to the Fed's slow approach, other economic leaders are pressuring the digital dollar. Sheila Bair, former chairman of the former Federal Insurance Institute (FDIC), testified before the Senate on September 25, 2019, that digital dollar technology is evolving rapidly and provides many promising benefits, including eliminating the need for brokers and avoiding central central point books.
The politicians, professors, financial technology executives and officials who left the office continue to push dialogue. Of particular note is the Digital Dollar Project, a partnership between Accenture and the Digital Dollar Foundation. Digital Dollar publications provide comments on digital dollars, including the American CBDC, which will be marked.
COVID-19 dollar pandemic digital legislation
The talk of digital dollars appeared again during the COVID-19 pandemic thanks to the new legislation, including the Banking for All Act and the Auto Extension Community Act or ABC Act introduced in March and April. 2020. respectively. Both the Banks Act for All and the ABC Act offer digital dollars as a more effective incentive mechanism, among other laws that discuss digital dollars.
These laws are an important step forward, but the introduction of new technologies will not happen immediately. For example, digital dollars issued under ABC will not be crypto assets, will not be CBDC and will not be used on the DLT network. The digital dollars issued under the ABC Act will reflect the debt obligations under a central ledger that Americans hold in their dollar portfolios. Both the central ledger and the dollar digital wallets will be supported by the Federal Reserve.