By George Ward
As the clamor for the development of a central bank digital currency continues to gain traction, a crypto researcher has raised concerns over the slow start on the part of the United States. The expert believes the US is on the verge of losing its grip on the global financial system due to its lack of action on CBDC.
The US Is Slow On CBDC
According to Yaya Fanusie, a crypto researcher and former CIA analyst, the United States is relatively slow in developing a central bank digital currency (CBDC) compared to other advanced economies. This, the expert noted, could potentially result in the US losing its grip on the global financial system as the race for CBDC implementation begins to heat up.
Fanusie, also the policy head at the crypto lobby group, the Crypto Council for Innovation, disclosed in a recent interview that the financial landscape had changed a lot thanks to the emergence of cryptocurrency. According to him, sanctioned countries continuously seek to transact with economic infrastructure outside the United States control to move funds freely across international borders.
Fanusie noted that centrally-issued CBDC could become part of the world financial infrastructure that will be widely adopted. Based on Fanusie’s opinion, if the US does not influence these new policies, it will significantly impact the country’s economic position among other countries.
The crypto expert added that if the United States continues its moment of silence and lags on CBDC adoption, it will have negative geopolitical implications in the coming years. Fanusie stated that the US has a potent sanction power central to its global financial status.
However, he added that if there is a shift from the part of the United States, this does not mean that China will become the dominant player in the global financial landscape.
Making A Move
However, based on its recent activities, the US Federal Reserve has made relative progress on its CBDC development by releasing the latest version of its whitepaper last month. According to reports, the Federal Reserve is yet to receive approval from the US government to proceed with its CBDC project.
Fanusie disclosed that China has benefited as a first-mover in the CBDC project because it started exploring the technology in 2014 and launched the digital Yuan pilot phase in January 2022. The expert noted that China has processed millions of transactions using the digital Yuan since last year.
China, according to Fanusie, is currently working with several jurisdictions on testing smart contracts that are programmed to their respective digital currencies. He added that the race is still in the CBDC frontier as countries seek an edge over their counterparts within their geopolitical landscape.
However, commentators on the CBDC race believe China’s CBDC project is mainly about local dominance. Meanwhile, experts believe the battle for CBDC implementation is heating up, and the next few weeks will shape the sector.