The global rise of crypto-currencies and the increasing use of digital payments have piqued the interest of the United States. Indeed, Joe Biden has signed an executive order asking federal agencies to consider implementing a central bank digital currency. Here's a closer look at the launch of the digital dollar.
Revolutionizing global finance with the digital dollar
On March 9, 2022, Joe Biden signed an executive order launching the process of creating a digital dollar to be issued by the CBDC (Central Bank Digital Currency). The Ministry of the Economy is to submit a report on the benefits and risks of this project within 6 months.
The creation of a digital greenback could revolutionize global finance, as the dollar is the world's main reserve currency. But given the risks associated with this innovation (challenges to the traditional banking industry, protection of user privacy, dangers to state security, etc.), the United States must be particularly cautious.
" We have to be very, very conscientious in our analysis because the implications " of creating a digital dollar would be " very profound for the country," a senior White House official told a news conference.
He adds that digital currency projects that are more developed in other countries do not compromise the dollar's dominance, enabling the United States to occupy an important place in global finance. The White House estimates that over a hundred countries are considering launching or have already created their own digital currencies. China, for example, recently took the next step in the development of its future digital currency, the e-yuan, designed to eventually replace banknotes and coins. For several months now, the Chinese have been able to download a new application onto their smartphones to test this future currency.
Addressing the risks associated with the development of cryptocurrencies
The digital dollar will be the dematerialized equivalent of bills and coins, and can therefore be used without going through a bank, which is currently necessary for dematerialized payments. But the United States is not about to leave the field open to foreign powers and private players. Joe Biden has confirmed his intention to bring some order to the proliferation of private cryptocurrencies, which are by nature highly volatile and totally decentralized, like bitcoin.
The tax authority's role will be to identify and combat the many risks associated with this phenomenon, including risks to international financial stability, risks to consumers and risks to companies that fall victim to cyberattacks and have to pay their attackers in cryptocurrency. On this point, a senior US administration official asserted that the executive branch would " continue to fight " any use of cryptocurrencies " to avoid US sanctions, and that applies to Russia as well ".