According to White House sources, USA President Joe Biden will issue an order to federal agencies on Wednesday to begin developing a digital US dollar.
According to a statement, the USA effort would explore the merits and possible hazards of private cryptocurrencies such as bitcoin while “putting urgency on research and development of a prospective United States CBDC.”
Countries exploring to launch own CBDC’s
The emergence of cryptocurrencies throughout the world and the increasing usage of digital payments have sparked interest in official digital money.
The possibility is being investigated by major central banks worldwide. Nigeria introduced its virtual currency in October, while El Salvador made bitcoin legal tender.
According to India’s finance minister, Nirmala Sitharaman, the country will debut a digital rupee this year.
More than 100 nations, including China’s digital yuan, are experimenting with or have begun pilot projects with their own central bank digital currency (CBDC).
Officials denied that the United States was late to the initiative.
“The consequences of perhaps releasing a digital dollar are enormous,” one official told reporters, emphasizing the American currency’s critical position in the global economy.
“We have to be extremely careful about that analysis because the ramifications of moving in this path are significant for the country that provides the world’s major reserve currency.”
Mr. Biden’s executive order will direct federal agencies, including the Treasury Department, to investigate consumer protection, financial inclusion, and the exploitation of digital assets for illegal purposes.
Worldwide crypto expansion
Digital assets, such as cryptocurrencies, have exploded in value in recent years, reaching a market valuation of $3 trillion last November, up from $14 billion just five years ago.
According to the White House, around 16 percent of adult Americans, or 40 million people, have invested in, traded, or utilized cryptocurrencies.
In January, the US Federal Reserve issued a paper stating that digital currencies may bring potential benefits to American consumers and businesses. Still, it is unclear if these benefits would outweigh the dangers.
According to Biden’s directive, US government agencies would investigate ways to prevent money laundering and the use of digital currencies to circumvent financial penalties.