USDC issuer doubts effectiveness of central bank tokens

by in Cryptocurrency News

USDC

Central banks wishing to issue their tokens (CBDC) believe that with the help of an innovative tool, they can modernize the financial infrastructure.

However, Circle, which developed the USDC stablecoin, has a different point of view. She estimates that the CBDC will harm the financial system. Analysts studied the Fed's project to launch a digital dollar and concluded that the token would become an extra tool.

Private stablecoins, on the contrary, have already solved all the tasks set by central banks. Developers of fiat-backed tokens are constantly innovating and contributing to the qualitative improvement of the economy.

If state digital currencies appear, they will stifle innovation, and the number of startups creating products focused on the blockchain industry will drastically decrease.

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Circle emphasized that the Federal Reserve has developed the concept of a digital dollar. However, it has yet to come up with a convincing mechanism that will keep CBDC holders safe.

Inflation is growing in the United States, and it is unlikely that the digital dollar will be able to strengthen citizens' confidence in the national currency. In addition, the CBDC will not solve the problems of access to financial services.

The report says: "It is not clear from the Fed's document, which was supposed to sum up the discussion on the digital dollar, how it neutralizes threats to financial stability."