US President Joe Biden on Wednesday (March 9, 2022) signed an executive order directing government agencies to assess the risks and benefits of creating a central bank digital dollar, US administration officials said. The Department of Treasury, Commerce and several agencies will also have to prepare studies relating to cryptocurrencies. Increased oversight of the cryptocurrency market, valued in November 2021 at more than $3 trillion, is critical to ensuring U.S. national security, financial stability and competitiveness, officials said. A recognition of the growing importance of cryptocurrencies
This highly anticipated executive order is seen by analysts as an unequivocal recognition of the growing importance of cryptocurrencies and their potential implications for financial systems. The US government will be tasked with assessing the technological infrastructure necessary for the eventual issuance of a digital currency by the Federal Reserve (Fed). An official said the United States would proceed with caution given the conventional dollar’s role as the world’s premier reserve currency.
The order also encourages the Fed to continue its research and development efforts. Nine countries have launched digital versions of their currencies and 16 others – including China – are in the development phase, according to the Atlantic Council, leading some in Washington to worry about the note losing dominance. green for the benefit of China. But the dollar remains supported by essential fundamentals, said the American official, referring to transparency, the rule of law and the independence of the Fed. “The role of the dollar has been and will continue to be crucial to the stability of the international monetary system as a whole. Foreign central bank digital currencies and their emergence do not threaten that dominance ,” he said.
5% of poor Americans currently don’t have a bank account
The executive order requires agencies, including the Securities and Exchange Commission (SEC) and the Consumer Financial Protection Bureau (CFPA), to examine, among other things, the systemic risk posed by cryptocurrencies and consumer protection. One of the main goals is to address the inefficiencies of the current US payments system and foster financial inclusion, especially for poor Americans, some 5% of whom currently do not have a bank account due to high fees, said said a manager.