Central Bank Digital Currency
The Federal Reserve is exploring the possibility of issuing digital currency backed by the central bank (CBDC) at some point in the future, which may have significant implications for cross-border international monetary transactions and other areas of the economy. As noted in this article, “potential benefits include faster and less costly transactions […] but the Fed must also consider the risk of cyberattacks, counterfeiting and fraud, as well as the impact on monetary policy and financial stability.” This will be an interesting development to watch, given its potential to disrupt the banking sector and other industries, but the feasible timing and eventual structure of a possible CBDC are unclear and warrant an ongoing assessment by tactical investors.
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- Anthony Winkels is Managing Partner and Wealth Advisor at Fortis Wealth Management
