White House Eyes Creation Of a Digital Dollar

The US is edging closer to developing a central bank digital currency (CBDC) after six months of research into the cryptocurrency industry. But the White House’s ‘first-ever’ comprehensive framework for the responsible development of digital assets has been criticised for ‘kicking the can down the road’.

Back in March, President Joe Biden issued an executive order (EO) calling on multiple agencies – Department of Treasury, Commerce, Justice and the White House Office of Science and Technology Policy – to do a ‘deep analysis’ of digital assets’ risks and opportunities.

This has resulted in nine reports outlining cryptocurrency impacts on financial markets, the environment, innovation and other elements of the economic system.

Together they ‘articulate a clear framework for responsible digital asset development’ calling on agencies to promote innovation by kickstarting private-sector research and development while mitigating the downside risks.

The reports also ‘recognise’ the potential benefits and risks of a US CBDC – or digital dollar – and encourage the Federal Reserve to continue its ongoing CBDC research, experimentation, and evaluation. It calls for the creation of a Treasury-led interagency working group to support the Federal Reserve’s efforts.

Regulatory and law enforcement agencies are also urged to collaborate to address acute digital assets risks facing consumers, investors, and businesses.