Top Official Says US Treasury Assessing Viability of Digital Dollar – Here’s the Latest
The US is actively evaluating whether a digital version of the dollar is in the national interest, the US Treasury Department’s undersecretary for domestic finance, Nellie Liang has said.
The work to assess the viability of a digital dollar – a form of central bank digital currency (CBDC) – is now being advanced by an interagency Working Group led by the Treasury Department, Liang said in a speech for the Atlantic Council on Wednesday.
Among the issues now being studied by the Working Group is how a digital dollar would impact America’s position in terms of global financial leadership, national security and privacy, illicit finance, and inclusion.
Based on the findings in these areas, the Working Group will develop recommendations to the Administration about the implications of a CBDC, the top US official said.
114 countries exploring CBDCs
In particular, Undersecretary Liang pointed to the fact that other countries are already developing their own CBDCs, and hinted that no CBDC in the US could make the country’s economy and financial markets less competitive.
114 countries are exploring CBDCs, and 11 countries have fully launched them, she said. Among the countries that have launched a CBDC is China with its digital yuan, which just last month was opened up for cross-border use with Hong Kong.
Likely as a result of other countries’ CBDC trials, Liang also pointed to the “global role of the U.S. dollar” as something policymakers need to consider when deciding on whether or not to launch a CBDC in the US.
Government “still evaluating” digital dollar
In conclusion, Liang said that the government is “still evaluating” whether a CBDC is right for the US. She added that participation in global standard-setting initiatives will be important going forward and said the US will share technology and technical expertise with other countries that are developing CBDCs.
“Our efforts to shape international standards are a key part of the framework for international engagement on digital assets,” she said.
Opinions remain divided on CBDCs
A central bank digital currency is something that has been discussed in the US for some time, and there are strong voices on both sides of the debate.
While proponents generally argue that a CBDC would help reinforce the US dollar’s position as the world’s reserve currency, others fear that it would strengthen the surveillance and control capabilities of the government.
As recently as last month, Tom Emmer, a Republican member of the House of Representatives, shared publicly that he is against a CBDC in the US. He called the idea of a CBDC a “surveillance-style digital dollar” and officially proposed legislation that would prevent a digital dollar from being introduced.
The Biden admin wants to create a surveillance-style digital dollar that is NOT:— Tom Emmer (@GOPMajorityWhip) February 28, 2023
That's why I introduced legislation to prevent unelected bureaucrats from stripping Americans of their right to financial privacy. pic.twitter.com/55e2nfmlJy