Why the U.S. Is Right to Let Stablecoins Lead — Not CBDCs This Time

The race toward Digital Currency is on — but the United States just hit the brakes on issuing its own Central Bank Digital Currency (CBDC). Instead, Washington is leaving the field open for private, US Dollar-backed stablecoins like USDC, PYUSD, and RLUSD.

At first glance, this might seem like US is falling behind. In reality, it’s a calculated choice — and a wise one.

The Allure of CBDCs

On paper, a CBDC promises the ultimate payments upgrade:

• Faster settlement — Freeing up capital by eliminating days-long transfer delays.

• Lower transaction costs — Making payments cheaper for individuals and small businesses.

• Programmable money — Enabling instant disaster relief, automated tax rebates, or targeted subsidies.

• Policy precision — Allowing real-time economic interventions without relying entirely on banks.

From the Bahamas’ Sand Dollar to China’s e-CNY pilots, Central Banks worldwide are exploring these advantages.

Why the U.S. Is Pumping the Brakes

But CBDCs also come with very real risks — ones the US is in no rush to take on:

• Privacy trade-offs: Every CBDC transaction could be recorded, creating the potential for government overreach.

• Programmable control: Rules on how or where citizens can spend money could be built in.

• Centralized power: Giving the state the ability to freeze or seize funds instantly.

In short: trust in a CBDC depends entirely on trusting the government that issues it — not everyone is comfortable with that.

Why Stablecoins Get the Green Light

Instead of pushing its own CBDC, the US is leaning into regulated private stablecoins:

• Market-driven innovation — Letting competition push technology forward.

• Existing frameworks — Building on trust and infrastructure already in place with regulated issuers.

• US Dollar dominance — Still keeping the U.S. dollar as the world’s reserve currency, just in tokenized form.

A privately issued, dollar-backed stablecoin "must hold reserves" — unlike a CBDC, which is “backed by government decree". That creates an additional layer of market trust and transparency.

The Strategic Advantage

By letting stablecoins lead, US keeps:

• Innovation in the private sector’s hands

• Choice in consumers’ hands

• Monetary control in balance

This approach sidesteps the adoption and trust pitfalls that have slowed or derailed CBDC rollouts in other nations.

Thoughts

CBDCs can be revolutionary — if voluntary, privacy-preserving, and independently overseen. But forcing one into the system too soon risks turning “Digital Cash” into “Digital Handcuffs.”

For now, the US is making the safer, freer bet: Let Private Company-Built Stablecoins dominate, keep CBDCs on the shelf.

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