The president of the United States, Joe Biden, will order his government this Wednesday to evaluate the creation of a US digital currency, backed by the Federal Reserve (Fed, the country’s central bank), according to the White House.
Biden will sign a decree for his government to “urgently” investigate the possibility of developing a central bank digital currency (known as CBDC, for its acronym in English), which are different from cryptocurrencies as they are protected by those financial entities of a country.
Biden’s order asks to evaluate “the possible benefits and risks” of that possible “digital dollar” and the “technological infrastructure” that would be necessary to issue it, explained a senior US official, who requested anonymity, in a telephone press conference.
The goal is to preserve “the centrality of the US dollar in the global financial system” and address Washington’s concerns about the “volatility” of cryptocurrencies such as bitcoin, he continued.
“Some early forms of financial innovation have ended up hurting American families while enriching a small group of people. That shows the need for robust protection for consumers and investors,” the official stressed.
Ten countries have launched CBDC digital currencies so far, including Nigeria with its e-Naira, Bahamas with its Sand Dollar; and DCash currency, available in Antigua and Barbuda, St. Kitts and Nevis, Montserrat, Dominica, Saint Vincent and the Grenadines, Saint Lucia, and Grenada.
According to the International Monetary Fund (IMF), a hundred countries are also exploring the possibility of creating their own CBDC, which are not like bitcoin because they have a single issuer (the central bank of each country) that controls the money market, just as than with paper currencies.
Unlike the money that the user currently perceives as virtual (deposits in commercial banks, for example), CBDCs would be issued directly by the central bank, so that a citizen could have a digital wallet with that currency without being linked to no commercial financial institution.
In addition, CBDCs would allow, in the style of cryptocurrencies, immediate transactions of all kinds, without, for example, a money transfer between individuals taking several hours or days to materialize.
In his decree, Biden will also ask his government to provide him with recommendations on the cryptocurrency market in general, and examine the possible risks they present to financial stability or national security, including through illicit finance.
The United States has criticized, for example, the adoption of bitcoin as legal tender in El Salvador: last week, the State Department warned in a report that this complicates the fight against money laundering and the financing of terrorism in the country.
The aforementioned US financier minimized the possibility that cryptocurrencies could be used in a “viable” way to evade the sanctions that the United States and its allies in Europe have imposed on Russia for its invasion of Ukraine, but assured that he will be attentive to that possibility. (I)
Source: Eluniverso
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