The US Treasury highlights the importance of CBDC
An investigation determined that CBDCs, or digital currencies issued by central banks, can increase the stability of the banking system of institutions and countries
The US Treasury’s Bureau of Financial Research recently indicated that central bank digital currencies (CBDC) can increase the stability of the banking system.
The institution’s researchers indicated that in difficult times, clients often act desperately and withdraw their funds, something that instead with a CBDC “could make runs of financial companies more likely or more serious.”
The nature of CBDC will allow policymakers to identify situations where funds are being converted, and not simply being withdrawn from a bank, thereby spotting problems earlier, which can lead to faster resolution.
“By enabling faster political reaction to a crisis, this information effect is another channel through which a CBDC can tend to improve rather than worsen financial stability”, highlights part of the research.
K. Tovar
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Source: Cointelegraph
