According to a new Bank of America analysis, US consumers will soon face a new financial reality: a central bank digital currency. US-backed CBDCs “are an inevitable evolution of today’s electronic currencies,” Bank of America crypto strategists Alkesh Shah and Andrew Moss wrote in a client note on Monday, according to Bloomberg. They projected that the first appearance of an American digital dollar could be only a few years away, the goal being to “improve the safe and effective domestic payments system.”

“On the one hand, they’re going to be looking at efficiencies, but, on the other hand, there’s a very real concern about maintaining the dollar’s place serving as the world’s reserve currency. At the moment, that isn’t at risk, but it would be foolish to think that, at some point, if the central bank didn’t adapt in ways that made international remittances more efficient and less costly, the topic could see renewed interest. In order to maintain the dollar’s global dominance as a currency, it is necessary for the financial system to adapt,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency in the United States,” Fed Chair Jerome Powell said in a statement. At the same time, the Biden Administration is busy at work developing a federal strategy on cryptocurrencies.

“The United States is finally beginning to come to grips with the staying power of blockchain technologies. Now, they’re faced with a number of policy questions, and time is of the essence on all of them. They must decide how to treat digital assets, legally speaking. They must better regulate exchanges so that there is standardization throughout the industry. That same standardization is also due is the realm of digital asset custody, which, right now, is a mess. Additionally, investors are clamoring for new guidance on the treatment of stablecoins,” said Gardner.

“We expect stablecoin adoption and use for payments to increase significantly over the next several years as financial institutions explore digital asset custody and trading solutions and as payments companies incorporate blockchain technology into their platforms,” the analysts noted in the report.

“All that on top of figuring out how they’re going to develop and establish their own CBDC,” Gardner noted. “China has been actively testing their technology since early last year. There are lots of concerns with what’s happening with China’s model, but the fact is that they are far out in front of other global powers in terms of their timetable,” acknowledged Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“If 2021 was the year of the crypto boom, 2022 is the year of its reckoning. It has taken governments a while to get on board. First, they didn’t understand the technology. Then they didn’t understand the staying power. Now, they seem to be seeing the forest through the trees,” said Gardner.