How will the Digital Dollar Impact the Cryptocurrency Market?
The US Federal Reserve exploration of a digital dollar can positively impact the cryptocurrency market should it come to pass. The Fed’s CBDC report released on January 20, 2021, might be one of the first steps the US Central Bank took towards the possibility of issuing a digital dollar in the future.
Cryptocurrency Market Impact
First, some cryptocurrencies like Algorand (ALGO) would gain the most from a digital dollar.
According to the Fed’s report, the US Federal Reserve is collaborating with MIT’s Digital Currency Initiative “to explore the development of alternative platforms.”
Algorand founder Silvio Micali is a professor at the Massachusetts Institute of Technology (MIT) and part of the Digital Currency Initiative. Algorand is also expected to launch its own quantum-resistant security feature, which is what Fed will be working on for its CBDC in 2022.
Contrary to the FUD around CBDCs, the FED-issued digital dollar wouldn’t be harmful to the crypto market. Fed Chairman Jerome Powell has recently suggested that “CBDCs and stable coins could co-exist.”
What is Algorand ALGO?
Algorand is a proof-of-stake (PoS) blockchain platform that aims to build a decentralized financial system with a stable and scalable blockchain.
The Algorand blockchain uses a new consensus protocol that solves the problems of blockchain scalability, security, and decentralization.
Algorand is designed to be a decentralized network that can support a vast range of applications and be developed by anyone with the ability to write smart contracts and build decentralized applications (dApps).
Looking forward
The cryptocurrency market will become more valuable than ever since big institutions like the Fed view blockchain technology as crucial in revolutionizing digital payments.
The decision of the Fed to explore a digital dollar can be seen as an endorsement of the cryptocurrency industry, which will likely attract more investors to the market.
