The United States evaluates the creation of the digital dollar


A South Korean banker carries US dollar bank notes at the Korea Exchange bank on February 22, 2005 in Seoul, South Korea.

With the appearance of various digital currencies and the already well-known cryptocurrencies, is a new future approaching for the US dollar? The dollar or green currency is one of the main currencies in the world, so what happens to it would generate a great impact at a global level.

As announced by the President of the United States, Joe Biden in a statement from the White House, the order has been given to start a project that seeks to convert the dollar into a digital currency, which would be backed by the Reserve. Federal (Fed), the country’s central bank. A measure that has already been initiated on a large scale in other countries.

According to the official statement, Biden would sign a decree for his Government to begin the relevant investigations to be able to evaluate the risks and benefits of a possible digital currency and thus be able to develop the central bank’s digital currency or Central Bank Digital Currency – CBDC, which would be under the protection of different financial entities in the country, unlike cryptocurrencies. This same order establishes that the Department of the Treasury, the Department of Commerce and other key agencies prepare reports on “the future of money.”

“We have to be very, very careful in our analysis because the implications of adopting the digital dollar would be very profound for the country whose currency is the world’s main reserve currency,” a senior White House official said, in remarks quoted by The Colombian.

Similarly, the statement states that the great global acceptance of cryptocurrencies such as bitcoin would be the main reason for starting in the world of digital currencies, with the aim of preserving “the centrality of the US dollar in the global financial system.”

“Some early forms of financial innovation have ended up hurting American families while making a small group of people rich. That shows the need for robust protection for consumers and investors. Too many Americans don’t have access to easy payment systems and bank accounts, and I think this is something a digital dollar, a central bank digital currency, could help with. It could result in faster, safer and cheaper payments, which I think are important goals,” the official said.

What is digital currency?

A digital currency or Central Bank Digital Currency – CBDC is not a cryptocurrency like bitcoin, since it would be the digitization of the currency issued by the US Federal Reserve body that controls the money market as it does with paper currencies.

Its main difference is that any citizen could have a digital wallet without the need to be linked to a financial institution or have a bank account. Which means that the digital currency can be had at all times.

On the other hand, according to Cronista, the digital currencies of central banks would reduce the risks of using cryptocurrencies and control the volatility of their prices.

“The development of digital assets offers the opportunity for the United States to reinforce its dominance in finance and technology, but it also has important consequences for consumer protection, financial stability, national security and the environment,” the House said. Blanca in her statement, according to Blu Radio.

In addition, in the decree, one of the key measures is that the national government is ordered to evaluate the technological infrastructure necessary to create a possible digital currency or dollar, which would be created by the Fed, thus being an electronic version of greenbacks. .

Brian Deese, director of the National Economic Council, and Jake Sullivan, White House national security adviser, said in remarks quoted by Investing, that “We are aware that the ‘financial innovation’ of the past has too often not benefited companies. working families, while exacerbating inequality and increasing systemic financial risk.”

After learning of Biden’s measure on Wednesday, March 9, 2022, Bitcoin rose that same day, achieving its biggest gain since February 28.

What are the advantages of a digital dollar?

One of the advantages of creating a CBDC would be to be able to amplify international payment systems, since in many cases, this system is not entirely universal.

Make transfers without the need for intermediaries. Not needing a bank, or ATMs which in some geographical areas are difficult to manage and being able to have your money immediately in the event of a possible bank failure, are some of the benefits of having a digital wallet with the digitization of this coin.

On the other hand, another advantage, for those who do not reside in the United States, or who need to acquire dollars, would be that it is no longer necessary to go to an exchange house or bank to buy this currency.

Whether for vacations abroad or simply for having dollars in your wallet, the digital dollar would mean leaving aside these entities mentioned above, since whoever wants to buy a dollar would do so directly with the United States government.

“Exchange houses would tend to disappear, because if you already have it [el dólar] digitally, to go abroad you do not need to go to the exchange house, buy your dollars and take them to another country. You already have your digital wallet that works for you just like it happens with bitcoin anywhere in the world,” says journalist Víctor Grosso, an expert on economic issues, in statements quoted by Pulzo, quoted from Blu Radio.

“If I have a bit of bitcoin and you have a digital wallet, I pass it to you and sell it to you. Likewise, operations and transfers can be made between people who also have digital dollars. This is how this world of digital payments and this new monetary world works”, concluded Grosso.

White House issues executive order on cryptocurrencyCNBC’s Ylan Mui joins ‘Squawk Box’ to report the details from the Biden administration’s executive order on crypto. For access to live and exclusive video from CNBC subscribe to CNBC PRO: » Subscribe to CNBC TV: » Subscribe to CNBC: Turn to CNBC TV for the latest stock market news and analysis.…2022-03-09T12:11:56Z

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