The Digital Science Report is finally out! Fed: Changing Financial Rates

The Federal Reserve (Fed) announced on the 20th (local time) that the bank of digital money (CBDC) will become the most profitable currency in the market. Digital advantages (CBDC) have been announced. New developments have the potential to change the US financial system.

The Fed believes that CBDCs could change the model of the US financial system, change the role and responsibilities of private companies and central banks, and hopes the US will move beyond authorized CBDCs.

The announcement is the result of Fed Chairman Powell's call for a full investigation into digital payments in May last year. The negative and positive opinion in the American Congress on the law allows to approve the numerical results. The bank is expected to hear further comments on May 20.

Additionally, the Fed believes that the CBDC announcement will help the US dollar stay in the global financial system, improve cross-border payments, increase tax inclusion, and boost US spending on new technologies.

However, the central bank has warned that there is a risk that bank deposits will still fall after the introduction of CBDCs, the private sector will be scrutinized by the government, and the report offers several solutions to these problems.

Additionally, a set of new procedures could be a new target for hackers, and the report says security could be particularly challenging because the Fed CBDC poses a higher risk of hacking than traditional payment services.

Currently, some Fed officials are still complaining about the benefits of the digital boom, including its biggest proponent, Lael Brainard, who was recently elected vice chair of policy for the Federal Open Market Committee (FOMC) task force.

The report did not mention the deadline for digital payments, but focused on FedNow, the daily payment and settlement scheduled for 2023. Digital Payments fears that the Federal Reserve's delay in promoting digital benefits may be lagging behind. compared to its global competitors.

Now, medium-sized financial institutions around the world, especially digital enterprises, are promoting their own digital advantages, and China is expanding its digital yuan pilot this year. However, Fed officials like Powell shouldn't worry about the rise of power play and believe it's all to be decided.

In the absence of digital currencies declared by the Federal Reserve, private companies now declare digital currencies in a fixed currency, which will also maintain the USD for the exchange rate at 1:1 fiat currency.