Biden launches digital dollar project

Posted 09 March, 2022

Will the greenback change era? US President Joe Biden will launch the project on Wednesday for a future "digital dollar", the White House announced on Tuesday, while a hundred countries are already engaged, more or less advanced, in this direction.

He will sign an executive order on Wednesday asking his administration to give "the greatest importance to the development and research for a potential central bank digital currency" (CBDC, "central bank digital currency") of the United States, whose currency dominates global finance, according to a statement.

"We have to be very, very careful in our analysis because the implications 'if we adopt a digital dollar would be 'very profound for the country whose currency is the world's main reserve currency," a senior official stressed. from the White House, on condition of anonymity, during a press conference.

The senior official, however, assured that, in his view, more advanced digital currency projects in other countries or monetary areas "do not threaten" this dominance of the dollar, which ensures the United States a privileged place in global finance.

According to the White House, more than 100 countries are considering launching, or have already launched digital currencies.

The United States has been thinking about such a project for some time now but has so far not launched a truly coordinated project towards a digital dollar.

The global rise of cryptocurrencies like bitcoin, and the growing use of digital payments, has sparked interest in an official digital currency, and the world's major central banks are exploring the possibility.

 

Coins and banknotes

 

Such digital currency is the dematerialized equivalent of coins and notes which are actually direct claims on central banks.

It can therefore in theory be used without going through a bank, which is currently necessary for dematerialized payments.

States want to avoid leaving this space to private actors, or to foreign powers.

More broadly, the American president will also ask the federal administration to look into the risks associated with the explosive development of cryptocurrencies, whether financial risks or security risks, use for criminal purposes or in a way that undermines national security.

On this last point, a senior official of the American administration assured that the American executive "would continue to fight forcefully" any use of cryptocurrencies "to avoid American sanctions, and this also applies to Russia", referred to by heavy Western economic retaliation since the invasion of Ukraine.

The same source, however, estimated that in the case of Russia, "we do not believe that the use of cryptocurrencies is a viable way to circumvent the financial sanctions" intended to cut the country off from global financial circuits.

The White House pointed out that, according to some studies, about 16% of American adults have invested in or used cryptocurrencies.

“The development of digital assets provides an opportunity for America to strengthen its dominance in finance and technology, but also has important implications for consumer protection, financial stability, national security, and the environment,” we read in the press release.

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