Daily Management Review

USA is speeding up work on the digital dollar


US President Joe Biden's administration has become more active in exploring the creation of a digital dollar amid China's plans for a digital yuan, sources familiar with the situation told Bloomberg.

The People's Bank (Central Bank) of China said in early April that it was testing the possibility of using the digital yuan for cross-border payments. The digital yuan has been in pilot use since last year in several Chinese cities, including Beijing, Shenzhen (Guangdong province, South China) and Suzhou (Jiangsu province, East China).

According to US officials, the digital yuan could threaten the dollar as the world's dominant reserve currency.

"Now that China's efforts are gaining momentum, officials from the government are stepping up their efforts to assess the possible implications," the agency quoted sources as saying.

At the same time, they said, the US side is less concerned about short-term challenges, the more so US authorities want to see how the digital yuan will work and if it can be used to circumvent US sanctions.

Biden’s administration is not yet planning to address the perceived long-term threats posed by the digital yuan, according to agency sources, but China's plans have prompted increased scrutiny of the digital dollar.

For example, US Federal Reserve Chairman Jerome Powell told CBS television last weekend that the regulator is involved in a large-scale research and development project for a digital dollar, but whether the creation of such a currency would be of public benefit remains to be seen.

source: cbs.com