The Dollar Wrecking Ball: Why is a strong US dollar so dangerous?
The rising US dollar strength is starting to produce cracks across economies and markets.
This year's World Economic Forum in Davos brought very interesting views on current economic problems, trends, but also challenges. One of them is to develop regulation for cryptocurrencies, but also to exploit the potential offered by cryptocurrencies. According to the WEF (World Economic Forum), this potential is hidden mainly in stablecoins and national digital currencies.
One of the most discussed topics was the Digital Dollar (CBDC). It is currently perceived as a response to the relatively successful development of the Chinese digital yen. Unlike China, whose progression is reportedly significant in this area, the US does not openly comment on the subject, which was also somewhat of a concern to the participants in Davos. The number of people calling for the active development of the digital dollar is rapidly increasing.
CFTC chairman, Christopher Giancarlo, for example, said that using traditional currencies in the digital world is "unfair to people." He was also supported by Neha Narula of the Digital Currency Initiative at MIT, who said the digital dollar was definitely worth considering. “The tracing potential pf CBDC would help reduce corruption and money laundering. CBDC would also allow politicians and economists to measure the direct impact of their policies and regulations more accurately and faster. At least that is the opinion of Henri Arslanian of PwC, who believes in CBDC in particular and the changes that this type of digital currency can bring. The central banks of Sweden, Switzerland, Canada, the United Kingdom, Japan, and the European Union, which recently announced cooperation on the development of their own digital currency, also support the idea. In addition to the aforementioned cooperation between these 6 banks and states such as the US or China, Estonia, Thailand, and Hong Kong are also working on developing their own national digital currency.
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