- The US central bank hosted an Inaugural Conference on the International Roles of the U.S. Dollar last month
- Per the conference write-up published on Tuesday, the panelists discussed the role of the US dollar and how private digital assets and CBDCs could shape the USD’s role going forward
- The panelists agreed that digital assets’ being linked to the value of the USD can bolster its position as the most dominant currency in the medium term
The Fed has held its inaugural conference on the international role of the US dollar
In June, the Federal Reserve (Fed) hosted its first-ever conference focused solely on the global role of the US dollar. On Monday, a write-up on the conference was published, which provides interesting insights into the positions held by top researchers, policymakers, and market experts on the “evolving roles of the U.S. dollar.”
The panelists invited by the Federal Reserve Board and the Federal Reserve Bank of New York discussed a number of topics in the June meeting, including the role of digital assets and central bank digital currencies (CBDCs) in relation to the dollar.
During a panel discussion on CBDCs – which was moderated by Lorie K. Logan, one of the key organizers of the Fed’s response to the COVID-19 pandemic – attendees agreed that the implementation of a digital dollar would not “lead to drastic changes in the global currency ecosystem.” The panelists added that CBDCs’ development tends to be focused on “domestic retail sectors,” which should not interfere with the dollar being the dominant currency in international banking.
The conference members also touched on private digital assets and concluded that they – much like CBDCs – don’t pose a direct threat to the dollar’s hegemony.
“The current landscape for digital assets has tended to be more centered on retail investors for speculative purposes with movement toward institutional investors constrained by the lack of a regulatory framework,” reads an excerpt from the write-up.
Interestingly, panelists concluded that as long as digital assets are linked to the dollar, they could actually reinforce the dollar’s position as the most dominant currency in the medium term.
Earlier this year, the Fed released a research paper on the viability of a USD-based CBDC. At the time, the Fed wrote that the so-called digital dollar would help maintain USD’s position as the world’s reserve currency.
David is a crypto enthusiast and an expert in personal finance. He has created numerous publications for different platforms. He loves to explore new things, and that’s how he discovered blockchain in the first place.