Multiple countries continue to develop their own central bank digital currencies (CBDCs). Currently, countries like China and Russia leave the task to their governments. The United States, on the other hand, leaves the work to the private sector. Brian Brooks, Acting Comptroller of the Currency, recently testified before the US House Of Representatives. In that hearing, he maintained the private sector needs to lead the way on a dollar-based CBDC rather than the federal government.

Private Companies Continue to Develop Stablecoins Based On The US Dollar

In fact, Brooks pointed to the fact that private companies have already accomplished this task. Various stablecoins based on the US Dollar exist in the market today. They're all designed to follow the price of the dollar and act as the US Dollar. For that reason, Brooks believes the federal government doesn't need to step in with its own solution. The private market has already done the bulk of this work for the government. True stablecoins will evolve into CBDCs on their own, according to Brooks.

Why CBDCs Remain A Priority Among Multiple Countries At The Moment

CBDCs utilize blockchain technology in order to offer real-time payments. An American CBDC would, unsurprisingly, be based on the United States Dollar. Without a doubt, CBDCs come with a variety of benefits, including increased security and faster processing. Transactions theoretically occur in real time and every single unit of the CBDC is uniquely identifiable. Proper CBDCs could replace paper currency in the future, but they're considered in early development. No proposed solution is ready for rollout.

Differing Opinions On How The United States Should Tackle Its Own CBDC

Jerome Powell, Chairman of the Federal Reserve, made recent statements about a potential digital dollar. In his remarks, he mentioned the private sector may not belong in the country's development of its own CBDC. Brooks countered this assertion by pointing out the power of the US private sector in a historic sense. He believes nothing is more powerful than the country's private sector. Likewise, to Brooks, a history of innovation means the private sector is the best and most capable solution here.