Treasury Department Exploring Digital Dollar
Back in March, President Biden signed an executive order on governmental oversight of Cryptocurrency. In that order, he asked the Federal Reserve if the central bank should adopt and create its digital dollar. Biden’s top economic and national security advisors stated, “[this] Will position the U.S. to keep a leading role in the innovation and governance of the digital assets ecosystem at home and abroad, in a way that protects consumers, is consistent with our democratic values and advances U.S. global competitiveness.”
Treasury Secretary Janet Yellen announced early last week that the Biden administration is now one step closer to developing a “digital dollar.” The reason for this is because some parts of the current payment system are deemed “too slow” or “expensive”. According to the nonpartisan think tank, Atlantic Council, 105 countries have already begun to explore or have already created a central bank digital currency and the U.S. is falling farther behind.
One significant change from adopting a centralized digital dollar compared to digital money available to the general public is that the new digital dollar would be a direct liability of the Federal Reserve and not that of a commercial bank.
Several Crypto lobbying firms have said that the reports by the Biden administration appear to be “kicking the can down the road” with no clear recommendations.
For more information, please reach out to the Professionals at The Center for Financial, Legal, and Tax Planning, Inc., at (618) 997-3436.