Who’s leading the next breakthrough? The current landscape of Central Bank Digital Currencies
6. The US’s approach — slower but with more prudency

While other countries are actively rolling out piloting projects, the United State, who had been one of the leading country in terms of technological advancement, seems to be a little bit behind on its progress towards issuing a CBDC. One of the reason is that for domestic consumers, the existing digital payment system in the US is already very convenient, most consumers are not willing to change their payment methods and adapt to a new digital payment system. A survey conducted by Genesis Mining consisting of 400 participants, revealed that less than 25% of participants agreed to the proposition of a Dollar CBDC. Most respondents have associated the concept of CBDC with crime activities fostered by cryptocurrencies, which could be the major reason why the general public in the US are pushing themselves against the idea of CBDC.

The US Federal Reserve is being exceptionally prudent on the issuance of US CBDC. In contrast with most of the countries focusing on the benefits of a CBDC, the US have identified many potential challenges and issues that would arise with the issuance of a CBDC, mainly concerning the security challenges, such as cyber attack, fraud and implementation of anti-money laundering laws in CBDC.

image source: Unsplash

The Deputy Treasury Secretary Justin Muzinich also said that “ finding a balance between preventing illicit activity and respecting consumer privacy will be a challenge.” The dilemma between security and privacy is a major challenge for US CBDC, as US citizens are more sensitive to cyber privacy issues.

“We do think it’s more important to get it right than to be first and getting it right means that we not only look at the potential benefits of a CBDC, but also the potential risks, and also recognize the important trade-offs that have to be thought through carefully,” — U.S. Federal Reserve Chair Jerome Powell

The US have been researching and developing a hypothetical CBDC with researchers at MIT, but the feasibility and the progress has been much slower than other countries such as China, Japan and Singapore.
['Americana Chen']
['Digital Transformation', 'Finance', 'Technology', 'Banking', 'Blockchain']