The adoption and use of cryptocurrencies have risen globally, and several countries have begun to launch their cryptocurrency. The United State Government, under the administration of Joe Biden, has been an ardent supporter of virtual currencies.
U.S. Payment System Operator Oppose Limitation Of Bank Participation In CBDC
Following the Joe Biden order for research into the design of the US CBDC, the payment system operating body came up with its report, which was forwarded to the Payment System Operator/The Clearing House. The United Treasury department alleged that one of the best ways to mitigate risk is to ban the participation of banks in CBDC. The federal body stated that the involvement of banks in cryptocurrency/CBDC heightens national security risks.
Responding to the 22-page report submitted by the Treasury Department, the Clearing House opposed the limitation proposal. The PSO of over 20 banks and payment facilitators stressed that banks and other financial institutions should be allowed to participate in crypto, especially CBDC.
The PSO further stated that the U.S. CBDC aimed to explore the potential of virtual currencies. The payment house also stated that the danger posed by non-central bank-backed digital assets (BTC, ETH, USDT, and others) is very high. The clearing house cleared some of the questions the Treasury posed and released some developed measures to curb national risks posed by the banking system.
Joe Biden Administration, An Ardent Support For Crypto
Few months ago, President Joe Biden declared his support for the design of the United States Central Bank Digital Currency. On the 9th of March, 2022, President Biden gave a presidential order to federal regulatory bodies to design and research possible potentials and regulations for the United State CBDC.
Joe Biden stated that the virtual currency space had potential that is still very much untapped. Although there are risks involved with cryptocurrency, its potential outweighs the risks. Possibly there are ways of mitigating risks attached to virtual currencies. After the President’s order, all involved federal agencies began to research and submit reports on their views surrounding the design of the U.S. CBDC. The positive and negative impacts were all reported to the PSOs.
The CBDC has received much welcome and positive response, although there are critics against the project. In Conclusion, the Clearing house called for a regulatory framework to mitigate the risk posed by non-bank digital assets and their service providers.