Joe Biden, the president, has directed government institutions to investigate the construction of a digital dollar, joining over a hundred other countries trialing with central bank digital currency for the future of money.
However, the move might change the global financial system, given the US dollar’s important role in commerce and as a haven for investors and governments. The US state agencies have been tasked with researching the benefits and vulnerabilities of creating a digital US currency, including consumer protection, financial inclusion, and illegal exploitation of digital assets.
A digital currency expert from California’s Stanford University has indicated that it could take several years for the digital dollar to be available even if the US government agrees to proceed with the digital project. He reasoned that factors such as technology would play a crucial role.
Central banks worldwide are beginning to rebuild their native currencies for the digital era as technology continues to transform the way people live, work, and spend and save money every day.
China, the world’s second-largest economy in terms of GDP, soft-launched its digital yuan in January and the CBDC now has over a hundred million members.
It is worth noting that the Chinese digital yuan does not use blockchain technology. However, it can be accessed through a government-backed smartphone app and could substitute cash payments. The digital yuan utilizes the latest tech infrastructure that Chinese commercial and internet banks and payment systems recognize.