The Fed Just Announced Details For A NEW U.S. Backed Cryptocurrency

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In this video, I cover how the Fed recently announced details for the U.S. Backed cryptocurrency.

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Over the past few years, cryptocurrencies have gained immense popularity with retail investors, especially with the rise of coins such as Bitcoin, Ethereum, and even Dogecoin. However, although retail investors definitely represent a large portion of the crypto economy, cryptocurrencies have also gained a lot of traction from large financial institutions, including banks, investment firms, and publicly traded companies. Nevertheless, there is still another major step that is currently in the works. And by that, I’m talking about the US government itself. In this video, I’ll cover how the US government recently announced some details for a potential US-backed cryptocurrency and why this new creation could impact the crypto market in a significant manner, and the way we live our lives. Welcome to Casgains Academy. If you’re new to the channel, please consider subscribing for more content like this, and let’s get right into it.
A lot of cryptocurrencies are known for being decentralized, which means that no government institutions or people are backing these cryptos. This is against the design of traditional currencies like the US dollar, where the Fed can and has shown to print more whenever it feels like it. In addition, many cryptos are popular because they have a limited supply, which can be used to hedge against the financial system. On the flip side, over the past few years, there’s been a huge increase in the interest for central bank digital currencies, also known as CBDCs. CBDCs have been looked to as a tool to modernize the financial system, and have already gained traction in several large countries across the world. Most recently, China announced the development of its own central bank digital currency through a pilot program, which shook the world in a drastic manner. But first of all, you might be wondering, how would this CBDC even work? China’s CBDC is known as the digital yuan, as that is practically what it is. The digital yuan has been proposed to use a foreign exchange platform like blockchain. There are two major new uses with the digital yuan that the paper yuan does not allow for. The first reason for the creation of China’s CBDC is that it allows regulators to quickly track people’s payments, which is definitely something that may be concerning for some citizens. The People’s Bank of China, which is China’s central bank, explained how “information flow and fund flows should be synchronized to facilitate regulators to monitor the transactions for compliance.” Mu Changchun, an official of the People's Bank of China (PBoC), has said a "completely anonymous central bank digital currency (CBDC) is not an option" based on international consensus. Rather, China wants to maintain control of its currency. He further states, "The precondition of CBDC's anonymity is it being risk-controllable and limited. A fully anonymous CBDC is not practical." This will likely be negatively received by a lot of you watching, especially since that essentially defeats the fundamental purpose of a cryptocurrency in the first place. Those that are concerned about privacy issues are not alone. A three-month survey done with the European Central Bank found that the biggest factor for a CBDC in the eyes of EU residents was privacy, which was actually valued over security. However, China clearly has a different view on CBDCs, which may affect the popularity of its use. In addition, there’s also one other major reason why China is creating a CBDC, which is for foreign exchange. Oftentimes, when we exchange our currency for other foreign currencies, the process can be complicated and expensive. Through a digital currency, the process will become cheaper and easier for foreign citizens to exchange their currency. With that being said, the US has also been going through its own cryptocurrency developments, which will certainly impact the crypto economy and the way we process our daily transactions. Since January of 2020, the US government has been working on developing a US-backed cryptocurrency under a project named the Digital Dollar Project. Central banks have actually begun talking about digital currencies decades ago. However, because the use of cash is now declining, especially during the pandemic, governments have brought it up once again