Washington, March 9 (AFP/APP): President Joe Biden on Wednesday ordered government agencies to begin work
on creating a digital US dollar, weighing the risks and benefits of a move that could be a game changer for the global financial system.
Coming amid the explosive rise of private crypto currencies like bitcoin, the US effort will place “the highest urgency on research and development efforts into the potential design and deployment options of a United States” digital currency, according to an executive order signed by Biden.
“A United States CBDC may have the potential to support efficient and low-cost transactions, particularly for cross border funds transfers and payments, and to foster greater access to the financial system,” the order said, adding it could also be less risky than private digital assets. CBDC stands for central bank digital currency.
The world’s largest economy will join more than 100 countries that are exploring or have launched pilot programs with their own central bank digital currency, including China’s digital yuan.
Treasury Secretary Janet Yellen said agencies will “evaluate the potential financial stability risks of digital assets and assess whether appropriate safeguards are in place.”
And due to the global implications of using digital assets, Washington will work with other governments on the effort that “will also address risks related to illicit finance, protecting consumers and investors, and preventing threats to the financial system and broader economy,” Yellen said in a statement.
Governments and investors around the world rely on the US greenback as a secure investment, and the dollar is central to commerce as well, including to the global oil market.
White House economic adviser Brian Deese said on CNBC that “maintaining US global leadership” is a central goal of the effort, but noted the study will also look into “unintended consequences.”
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