President Joe Biden’s administration is moving closer to creating a central bank digital currency, known as digital dollarwhich he said would help enhance America’s role as a leader in the global financial system.

The White House reported Friday that after Biden issued an executive order in March directing various federal agencies to examine how digital assets regulate, they produced nine reports, covering the impact of cryptocurrencies on financial markets, the environment, innovation, and other elements of the economic system. .

Treasury Secretary Janet Yellen said one of the Department’s recommendations is that countries “advance policy and technical work on potential central bank digital currencies, or CBDCs, so that the United States is prepared if it is determined that CBDCs are beneficial to our interests.”

“Right now, some aspects of our current payment system are either too slow or too expensive,” Yellen admitted Thursday during a press conference call discussing some of the findings from the report.

Central bank digital currencies differ from publicly available digital money, such as bank account balances, in that they will be the direct responsibility of the Federal Reserve, not commercial banks.

According to the Atlantic Council think tank, 105 countries representing more than 95% of global gross domestic product are exploring or have created central bank digital currencies.

The Center concluded that the United States and Britain were far behind in the process.

The Ministry of Finance and Justice, the Bureau of Consumer Financial Protection, the Securities and Exchange Commission and other agencies are tasked with contributing reports that will address various issues related to the risk, development, and use of digital assets. Various reports will be released in the coming months and weeks.

Eswar Prasad, a professor of commerce at Cornell University who studies currency digitization, said the Treasury report “takes a positive position on how the digital dollar can play a useful role in improving payment options for individuals and businesses.” , while acknowledging the risks of its development.

He said the report paved the way for the creation of regulations by institutions and legislation “that could increase the risk-benefit ratio associated with cryptocurrencies and related technologies.”

FONTS: Associated Press