I'm Coy Wells for U.S. Money Reserve. Over the past few years, central banks from countries around the world have begun creating their own digital currencies. These assets are known as central bank digital currencies, or CBDCs for short. CBDCs are different from regular cryptocurrencies like Bitcoin because they are backed by governments and are meant to be used within their economies like other traditional currencies.
Some countries, including China and Sweden, have already launched digital currency pilot programs. Other nations, such as the United Kingdom, have expressed interest in creating their digital currencies and have begun research projects to explore the idea of creating their own digital currencies. Notably, the so-called BRICs countries, Brazil, Russia, India, China and South Africa, are reportedly working on a digital currency for use with each other, which would allow them to reduce their dependency on the U.S. dollar, as well as influence of the United States government within their countries.
In April of this year, President Lula of Brazil said that he asks himself every night why all countries have to base their trade on the U.S. dollar. In May, Russian officials stationed in India stated that they are the ones spearheading the digital currency project. This news comes months after Russia was reportedly working on a separate digital currency, one backed by gold, with the nation of Iran.
More information regarding BRICs currency is expected to emerge during the annual BRICs summit, which is set to take place this August in South Africa. Central bank digital currencies are not limited to other nations. In March 2022, President Biden signed Executive Order 14067, requiring our government to assess, among other things, the risks and benefits of creating a central bank digital dollar.
A few months later, in November of 2022, officials from the Federal Reserve Bank of New York worked with major financial institutions like Citigroup, HSBC, Mastercard, and Wells Fargo to launch a digital dollar pilot program. This digital form of the dollar is often referred as the fed coin. Meanwhile, the idea of a digital dollar has many experts concerned about privacy.
Research papers released by the Federal Reserve and the Federal Reserve Bank of Boston noted that consumers privacy may be affected by implementations of national digital currencies. Another risk of digital assets was identified by an economist at Cornell University, who told The Wall Street Journal that through control of a digital currency, a government body could limit transactions for products it deems problematic, hampering free trade.
Consumers worried about the implications of a digital dollar, or ever increasing digital nature of our economy, may wish to explore the benefits of owning hard assets like physical gold. Gold was first used as a medium of exchange long before any paper currencies, and exist outside of the traditional banking system. To learn more about the benefits of owning physical gold and to receive your free gold information kit, call U.S. Money Reserve and speak to one of our dedicated account executives today.
Once again, this is Coy Wells, and thank you for joining us on Market Insider.
