The use of Stablecoins in various transactions will increase, and a CBDC will be launched in the US by 2030, according to Bank of America. The bank also believes that such a product is “inevitable” even though US authorities are diligently working on issuing their own central bank digital currency. Additionally, researchers at large banking organizations believe that Stablecoins will continue to thrive and play a significant role in the monetary system.
Are US CBDCs inevitable?
Several central banks have announced plans to release digital currencies, but very few have already done so. Canada has a digital version of the Canadian dollar.
Yet, the US has always been perceived as lagging behind its rivals, with Fed Chair Jerome Powell stating that it is more important to do things right than to be first. Powell noted recently that CBDCs and Stablecoins can coexist in a modern and digital economy.
Also, the world’s largest economy believes that the China way will not work within its borders. Yet, certain reports indicate that the US may be considering launching a CBDC.
The Bank of America estimates that such a product will be available in the US between 2025 and 2030. Citing bank strategists Alkesh Shah and Andrew Moss, Bloomberg writes that CBDCs “are an inevitable evolution of today’s electronic currencies.”
The Federal Reserve released a report last week that examines the pros and cons of central bank digital currency. However, CBDCs could harm people’s privacy as the government can monitor and control issuance and transactions. On the other hand, the paper noted that faster settlements and cheaper transactions could result in.
The Price Of Stablecoins Will Keep Rising
It is evident that Stablecoins are a major part of the cryptocurrency market, as their market share has grown in the past few years to reach a multi-billion dollar market share. Currently, two Stablecoins rank among the five largest cryptocurrencies worldwide by market capitalization.
In the following few years, strategists from Bank of America believe that this trend will only continue to grow, especially if the US does not move forward with its CBDC.
“As payment companies incorporate blockchain technology into their platforms and financial institutions explore digital asset custody and trading solutions, Stablecoin adoption and use for payments are expected to grow significantly,” the note by Bank of America concluded.