The U. S. government’s comparatively delayed commencement of central bank digital currency (CBDC) creation, according to Yaya Fanusie, a crypto expert and former CIA analyst, could cause it to lose control over the global economy. In an interview on February 28 with Bloomberg, Fanusie, the director of policy at the Crypto Council for Innovation, a crypto activist organisation, clarified that legitimised states are seeking to conduct business on finance system that’s not governed or largely driven by the U.S. to transfer assets more flexibly cross-borders. Fanusie believes that CBDCs issued by governments may become a fundamental component of the world’s financial system.
It affects U.S. financial statesmanship if the United States has very little control over all the present norms. Fanusie believes that if the U.S. continues to be hesitant and does not promptly adopt CBDCs, this could potentially result in issues and unforeseen global political consequences. The digitised dollar initiative, known as CBDC, has lately garnered headway thanks to the U.S. Federal Reserve, which on January 18 published the most recent edition of its white paper.
Unfortunately, the Federal Reserve is yet to have secured permission from the US administration to move through with the CBDC initiative. According to Fanusie, China has an almost-first mover advantage since they have been researching CBDCs since 2014 and released a pilot version of their digital yuan on January 4, 2022. This digital currency has already processed millions of transactions and been used by millions of individuals. Fanusie mentioned that numerous pilots are currently testing smart contracts to make CBDCs programmable, and China is assisting other countries in adopting comparable standards.
Additionally, he suggested that there may be a silent competition in the CBDC realm as countries strive to gain a geopolitical advantage. Some analysts have previously suggested that China’s interest in CBDCs is primarily aimed at achieving domestic dominance rather than competing with the U.S. dollar. According to reports, CBDCs that operate on ledgers controlled by the state are sometimes more effective and user-friendly than decentralised public networks such as Ethereum and Bitcoin.
However, some critics of CBDCs argue that governments are using blockchain-driven CBDCs to maintain a level of financial control over their citizens. Recently, there has been resistance in the U.S. from Congressman Tom Emmer, who is pro-crypto and introduced the CBDC Anti-Surveillance State Act to safeguard the financial privacy of U.S. citizens from actions taken by the Federal Reserve.