The Federal Reserve finally released its long awaited paper in regards to creating a Central Bank Digital Currency or CBDC. Although this is just first look at the option, this could signal to a possible shift that could disrupt cryptocurrencies for better or for worse. This comes after Russia signaled that they are looking to ban crypto currency, following its close ally China .
The question is , if the Fed is looking into crypto, does that mean regulation is soon to follow? If regulation comes, influencers and pump and dumpers could be looking at some jail time. These small crypto coins that popped up all over, with social media influencers peddling the coin, would fall under SEC regulation. If that is the case, these situations would be viewed similar to pump and dump shops as well as front trading brokers. If the Wolf of Wall Street taught us anything, this means some hefty fines and jail time. But I digress.
Some key points from the Fed paper are as follows:
PROS:
Digital Dollar would provide mobility in moving money into the financial system as well as aid
Allow those without banks to access the banking system digitally
Liquidity
Ease of adjusting interest rates directly with the CBDC
CONS:
Government regulation on consumers
Government overwatch into consumer spending
SEC regulation on pump and dump micro coins
Although this shouldn't have an affect on the dollar, this could be a concern for BTC and other major coins that could be seeing a fate similar to that of China and Russia. If the US follows their lead, expect crypto to tank. The good news though, is you will no longer fall victim to scamming coins or crypto owners that take all your money from your wallet then bankrupt the coin.
The Fed will be taking comments for 120 days, and given the current market crash that is imminent, I don't expect an answer on this anytime soon.
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