The U.S. Federal Reserve Lags Behind Peers in Developing CBDC

The Federal Reserve's Lag in CBDC Development

According to a recent blog post by the Atlantic Council, the U.S. Federal Reserve is falling behind its peers in the development of a central bank digital currency (CBDC). The post highlights the lack of resources and manpower dedicated to CBDC development and innovation within the Federal Reserve.

Comparison with the Bank of China

The authors of the blog post, Josh Lipsky and Ananya Kumar, point out that the Bank of China has over 300 people working on its CBDC, while the Federal Reserve has only a team of twenty individuals working on a digital alternative to the dollar. This stark difference in manpower reflects the Federal Reserve's lag in CBDC development.

Delayed Fednow System

In addition to the lack of resources, the Federal Reserve's Fednow system, which is its interbank settlement system, has taken longer to launch compared to similar systems in Europe. The early adoption of Fednow has also been limited. These delays further contribute to the Federal Reserve's lag in CBDC development.

The Belief in Dollar's Lack of Need for Innovation

One of the reasons behind the Federal Reserve's lag in CBDC development is the belief among officials and politicians that the dollar does not need to innovate. This belief stems from the fear of disrupting the currency that underpins the global economy. However, the authors argue that this belief is a miscalculation and that innovation is necessary for the dollar's future.

Opposition to CBDC

Not only do Federal Reserve officials and Capitol Hill politicians express opposition to the CBDC, but former U.S. President Donald Trump has also vowed to block its creation if reelected. However, the Atlantic Council blog post emphasizes that payment innovation does not have to wait until after the November election.

Comparison with Central Banks in Centralized Countries

Franklin Knoll, an expert at the Federal Reserve Bank of Kansas City, questions the comparison made in the blog post between the U.S. Federal Reserve and central banks in centralized countries like Japan or the U.K. Knoll argues that central banks in these countries have more independence and agility, allowing them to move faster in monetary matters. The Federal Reserve, on the other hand, is a decentralized collection of public/private banks spread across the country.

Impact of U.S. Community Banks

Noll also suggests that the blog post overlooks the resistance of U.S. community banks to the digital currency. Their opposition may contribute to the perceived opposition of U.S. politicians to the CBDC.

In conclusion, the U.S. Federal Reserve is lagging behind its peers in the development of a CBDC. The lack of resources, delays in launching the Fednow system, and the belief in the dollar's lack of need for innovation contribute to this lag. However, the blog post argues that innovation is crucial for the future of the dollar and that payment innovation can occur before the November election. The comparison with central banks in centralized countries and the impact of U.S. community banks should also be taken into account when assessing the Federal Reserve's position on CBDC.

Frequently Asked Questions

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It is a smart move to purchase gold futures. These contracts will guarantee that you will receive a specific amount of gold at an agreed price.

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What precious metal would your investment preference be?

What precious metals can you invest in for retirement?

Knowing what you have saved so far and where you plan to save money in the future is the first step towards retirement planning. If you don't know how much you currently have saved, start by taking an inventory of everything you own. This includes all savings accounts and stocks, bonds or mutual funds. It also should include certificates of Deposit (CDs), life insurance policies. Annuities, 401k plans, real-estate investments, and other assets like precious metals. You can then add up all these items to determine the amount of investment you have.

If you are less than 59 1/2 years of age, you may be interested in opening a Roth IRA. While a Roth IRA does not allow you to deduct contributions from taxable income, a traditional IRA allows for that. You won't be allowed to deduct tax for future earnings.

You will need another investment account if you decide that you require more money. Start with a regular brokerage.

How much should precious metals make up your portfolio?

To protect yourself from inflation, investing in physical metals is the best option. This is because you not only get the current price but also the future value when you invest precious metals. So as prices rise, so does the value of your investment.

Gains will be taxed if you keep your investments for at minimum five years. After that time, capital gains taxes will be due. If you want to learn more about how to buy gold coins, visit our website.

Can you hold precious metals in an IRA?

The answer to that question will depend on whether the IRA owner plans to diversify his holdings to gold and/or keep them safekeeping.

He has two options if he wishes to diversify. He could purchase physical bars of gold or silver from a dealer and then sell these items to him at the end. Imagine he doesn't desire to sell off his precious metals investments. In that case, he should continue holding onto them as they would be perfectly suitable for storing within an IRA account.


  • Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (
  • Silver must be 99.9% pure • (
  • The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (
  • You can only purchase gold bars of at least 99.5% purity. (

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How To

How to buy gold for your Gold IRA

A term that describes precious metals is gold, silver and palladium. It's any element naturally occurring with atomic numbers 79 to 110 (excluding helium), that is valued for its rarity or beauty. Precious metals that are most commonly used include silver and gold. Precious metals are often used as money, jewelry, industrial goods, and art objects.

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If you prefer owning shares of gold rather than holding actual gold, you should consider buying gold futures. Futures allow you to speculate as to how the gold price will change. You can purchase gold futures to get exposure to the gold price, but not the actual commodity.

A gold contract could be purchased if you wanted to speculate on the future price of gold. My position after the contract expires will be either “long” (or “short”) A long contract is one in which I believe that the price of gold will rise. I'm willing now to pay someone else money, but I promise I'll get more money at the end. A short contract, on the other hand, means I believe the price of gold is going to drop. In exchange for making less money in the future, I am willing to accept the money now.

I will receive the amount of gold in the contract, plus interest, when the contract ends. By doing this, I can get exposure to the market price for gold without actually owning it.

Precious Metals are great investments as they are difficult to counterfeit. While paper currencies can be easily counterfeited by printing new bills, precious metals cannot. It is because precious metals are hardier than paper currencies that they can be counterfeited by printing new bills.


By: Terence Zimwara
Title: The U.S. Federal Reserve Lags Behind Peers in Developing CBDC
Sourced From:
Published Date: Mon, 29 Jan 2024 07:00:28 +0000

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