US government to look into digital currency option, Biden confirms

President Joe Biden will sign an executive order today requiring the US government to assess the risks and benefits of creating a central bank digital currency (CBDC), said administration officials.

According to the official, the US will move forward cautiously on the project given the dollar’s role as the world’s primary reserve currency.

“We’ve got to be very, very deliberate about that analysis because the implications of our moving in this direction are profound for the country that issues the world’s primary reserve currency,” said the source in a report on Reuters.

A CBDC is a digital form of a country’s fiat currency, like cryptocurrency, but issued by the government in the same way as traditional paper money.

The US Federal Reserve had asked Congress to consider whether pursuing a digital dollar was necessary last January, with the demand for such a service growing over the course of the pandemic and subsequent boom of cryptos.

So far, nine countries have launched digital versions of their central bank’s currencies, with 16 others in the process of creating their own.

The long-awaited executive order will also regulate cryptocurrencies and had caused fear among investors that the US would look to regulate the market heavily when rumours first appeared last October.

However, US Treasury Secretary Janet Yellen published remarks over the order slightly early, which seemed to show that the US would support “responsible innovation” of cryptos, easing concerns and sending Bitcoin surging.