On March 15, 2021, Ed Wilson was quoted in PYMNTS on the creation of sovereign digital currencies. According to the article, U.S. Treasury Secretary Janet Yellen said last month that central banks should explore creating and issuing sovereign digital currencies. The hypothesis is that such currencies — digital dollars among them — could create “faster, safer and cheaper payments,” she said at a virtual conference. Yellen noted that among the many things to consider is how regulators would “manage money laundering and illicit finance issues.”
Wilson said the rise of cryptocurrencies demands advanced technologies to close the gap with financial criminals. But playing defense isn’t necessarily the sharp tip of Wilson’s spear. The opportunity to have money on an undisputable and never-forgotten ledger would increase transparency and fairness. With ethical companies and cutting-edge technology, crypto could be the way to a new world order in anti-money laundering (AML), characterized by fairness, efficiency, and accountability.
Wilson believes digital dollars can address the need for a central bank digital currency (CBDC) and more security around the general area of cryptocurrency. While existing electronic payment mechanisms work on an account-based model, the digital dollar differentiates itself as a token, combining cash-like properties with many of the benefits of the existing account-based payment mechanisms.
According to Wilson, the digital dollar could potentially solve the vexing problem of financial inclusion by making account openings ubiquitous and streamlined. And along the way, the Federal Reserve, with those digital dollars in place (and the means of distributing that money), would be adept at addressing quick settlement and compliance. “It’s a twofer,” he said.
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