When China announced officially that they were developing their own central bank-issued token which would be digital version of the yuan, it was significant for many within the crypto industry as it shows just how important the use of digital currency had become to the point that one of the most powerful and populous nations in the world was developing their own. Beyond this, it was also indicative of the ripple effect that was to come in which many more countries would be looking into their own digital currency as this has been seen with a top lawmaker in Japan making the same recommendation. 

Once again, these sentiments have been echoed by the top official within government and this time, it is the new nominee for the federal reserve.

The Need for CBDC

This new statement was made after Tom Cotton, a Republican senator from Arkansas, made a speech in front of several lawmakers including the nominee for the Federal Reserve Board of Governors, Judy Shelton. According to him, the need for a central bank digital currency in the United States is not merely to keep up with innovation or for private use but to maintain the dollar’s status within the world economy.

“We need the digital currency a little bit less I would argue internally, but rather to help preserve the primacy of the dollar worldwide,” he said.

Shelton was asked about her opinion regarding a central bank digital currency and the idea of digital tokens in general and she responded positively.

“I think that’s an extremely important discussion and I agree with your assessment: I think we’re compelled to think about that,” she said. 

A few years ago, the idea of a central bank of a nation issuing a digital currency seemed like an uphill battle. This is because cryptocurrencies, in general, were looked at as deviant concepts that would have no place on the world stage. However, cryptocurrency, in particular the popular ones like bitcoin, have gone on to defy expectations and have created a ripple effect in which not only private companies such as Facebook are launching cryptocurrencies but entire nations are seeing the benefits of them as well.

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