Joe Biden’s administration is finally moving ahead with its project to launch a central bank digital currency (CBDC), in this case a digital dollar. For the government, a digital version of the dollar will help strengthen the U.S. role as a leader in the global financial system.
Later this week, the government issued a series of reports, including one on the digital dollar. According to the document, an interagency working group will meet on a regular basis to support the Federal Reserve’s (Fed) ongoing research into a US CBDC.
In addition, the group will have to prepare the rest of the federal government if or when the Fed decides to create the digital version of the dollar.
Treasury recommends launching a digital dollar
As reported by the Associated Press, Treasury Secretary Janet Yellen said that her office recommends that the US launch the CBDC. According to her, one should move forward with “policy and technical work on a potential central bank digital currency, or CBDC.” The idea, according to Yellen, is that the US should be prepared if CBDC is in the national interest.
“Right now, some aspects of our current payment system are too slow or too expensive,” Yellen told reporters Thursday introducing some of the reports findings.
A senior government official, who was not identified, explained that the U.S. wanted to be in a position to issue a CBDC if the Fed decides it is in the country’s interest to create one. In the U.S. case, the CBDC would be a direct liability of the Federal Reserve, not a commercial bank.
The Treasury, the country’s Department of Justice; the Consumer Financial Protection Bureau; the SEC and other agencies were tasked with contributing to reports addressing risks, the development and use of digital assets in the country.
US lagging behind in plans to launch CBDC
On CBDC in particular, the U.S. board found that the country is far behind in creating a digital dollar. This is because it is estimated that about 90 percent of the world’s countries are already studying the launch of a CBDC. China, for example, is already well advanced in this regard, testing its digital currency months ago.
The Bahamas, meanwhile, has already launched its digital currency, the Sand Dollar, in 2020. Brazil is also moving forward with the digital real and promises to launch it in 2024.