Home CryptocurrencyAltcoins Is the U.S. Making A Mistake By Not Developing A Government-Backed Crypto Token?

Is the U.S. Making A Mistake By Not Developing A Government-Backed Crypto Token?

by Pragati Shrivastava

China is in research and development of the Digital RMB, Venezuela has the Petro, and Iran is investing in the development and launch of its own cryptocurrency. In fact, even the EU is tossing around the idea of a digital currency, and there are many more countries looking to digitize their monetary systems – but where is the United States as far as the development and launch of its own crypto token?

Wolfgang Koester, Chief Strategy Officer of Kyriba, said that financial analysts must focus on active liquidity management to avoid volatility issues. He cited the example of Chinese Yuans whose volatility has increased significantly in recent times. Focusing on managing the liquidity, Koester said that the US government is making a mistake by not developing its digital currency, as its competitor, China, is all set to launch its central bank-issued Digital RMB towards the end of this year.

While the creation of a digital currency would not impact the market value of the USD, it would tremendously streamline the debt settlement and many other complex aspects of the economy, one of the more important aspects being instant liquidity where the settlement of bonds and remittances would be faster and technically more secure than traditional methods.

Governments around the world like China, India, and Venezuela are vested in the idea of digital currencies. Their digital currency could open new trade gates as the settlement time would be less, and the process would be more transparent and efficient. Some argue that their digital currency is being developed to go around economic sanctions. But, in order to contain the ongoing issue of volatility in currency, government and economists must focus on risk management; they must have access to data and be proactive in understanding the issues they are facing.

Though digitization may not necessarily decrease the volatility, the volatility will still be governed by market factors and it may actually increase as people would react to the market. This being said, a digital market could react faster than traditional markets, which has its positives and negatives. The central idea behind the creation of digital currencies should be understanding issues that are causing the current market meltdown and then focusing on eliminating those by streamlining the process.

China has been very skeptical with cryptocurrency, in part because it denigrates their control, thus prompting their ban on crypto exchanges, which led to the idea of banning crypto mining in the nation. But China is smart to see the potential in the underlying tech of blockchain and moved forward with their central bank-issued currency to settle internal financial transactions. Although the development started 2-3 years back, they really picked up speed due to Facebook’s Libra announcement.

This begs the question: Is the U.S. making a mistake by not developing its own crypto token? Is it possible that one is in the works and we simply don’t know about it yet? This remains to be seen. What are your thoughts on the subject? We’d like to know!

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