Central Bank issued Digital Currencies (CBDCs) are not a new topic, in fact it has taken the spotlight ever since Facebook announced their entry to the currency space.
After Black Thursday, when the Federal Reserve was sending stimulus checks to US citizens, a stimulus package was offered by the House of Democrats surrounding the creation of a ‘Digital Dollar’ which would ease up this process tremendously.
“The Digitization of Money and Payments”
The United States Senate has met on June 30th to discuss the digitisation of the US dollar and the hurdles that must be passed before such a product is put in circulation. Multiple industry experts were present for that meeting, including the CEO of Paxos Charles Cascarilla. As Paxos have created and put in circulation their own stablecoin pegged to the US Dollar (PAX), he has valuable information and experience that can be passed on.
The most commonly referred to problem is friction. If the dollar is to be digitized then that new solution must be highly efficient and present very low friction. Professor Nakita Q. Cuttino stated: “Any solution should have low transaction costs. In the early days for Bitcoins the transaction cost was extremely high and remains extremely high.”
Given the acceleration of innovation in the blockchain space, that solution may not be far away. The only issue that comes with high throughput is lowered security which must be resolved before any steps forward are taken.