56% of senior bank officials do not consider crypto-related products and services a priority
- Most officials predict that crypto technology will not be needed for cash management practices for at least the next five years.
- The US Fed plans to release the digital dollar once lawmakers approve its proposal.
A US Federal Reserve board has surveyed top banking officials from 80 banks to find out their stance on the near future of crypto-related products and services. The council released the results of its investigation on July 15. The results showed that more than 56% of these leaders said their growth and development plan for the next two years included distributed ledger technology (DLT) or crypto-related products and services.
However, 27% said they would make this technology a medium or high priority over the time period mentioned above. Meanwhile, 40% of those managers said they would make this technology a medium or high priority for their banks over the next five years.
The results of the Fed’s survey. Source: Federal Reserve
The responses from these bank officials aligned with the impact of crypto on liquidity management practices. Most survey participants predicted that crypto technology would have no relevance to cash management practices over the next five years.
However, a few of the bank’s officials said they would adapt if it became necessary. Therefore, they actively follow market events. Respondents to this survey were senior financial officers of banks that held nearly 75% of the banking system’s total reserve balances in May 2022. Forty-six of these senior bank officers interviewed were from domestic banks, while the 34 others were with foreign financial institutions.
The case of a digital dollar
If U.S. lawmakers or regulators approve the release of the digital dollar, the U.S. central bank (the Federal Reserve) would be responsible for its release and oversight. Some lawmakers favor the launch of the digital dollar. On Wednesday, Connecticut Rep. Jim Himes House member proposed to Congress the benefits of the digital dollar.
Himes argues that a digital dollar would allow the United States to keep up with fintech innovations. However, he suggested that the digital dollar should be an alternative, not a replacement, to the fiat dollar.
Nevertheless, major financial regulators in the United States (Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are working together to enforce crypto regulations and regulate other areas of its financial services system. .
Earlier in the week, the Senate approved Michael Barr as the next vice president overseeing America’s apex bank. Confirmation from Barr (a former Ripple adviser) means there will be seven members of the US Fed Board of Governors this year.
Part of Barr’s responsibilities would be to create policy proposals for the Fed and oversee the enforcement of regulations for specific financial companies. It reports only to Fed Chairman Jerry Powell.