President Joe Biden on Wednesday urged the federal government to research and develop a digital dollar in an executive order describing broader directives for a coordinated and comprehensive U.S. approach to digital assets.
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“My Administration places the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC,” the Executive Order on Ensuring Responsible Development of Digital Assets states, adding that the U.S. should take the necessary “actions required to launch a United States CBDC if doing so is deemed to be in the national interest.”
Biden expressed concern that private and foreign development of digital assets are leaving the U.S. behind: “While many activities involving digital assets are within the scope of existing domestic laws and regulations, an area where the United States has been a global leader, growing development and adoption of digital assets and related innovations, as well as inconsistent controls to defend against certain key risks, necessitate an evolution and alignment of the United States Government approach to digital assets.”
By comparison, China’s CBDC effort is in its final stages, with multiple pilot cities having tested e-CNY (China’s central bank digital currency (CBDC)) in retail, government services, and transport; most recently, e-CNY was used at the 2022 Winter Olympic Games in Beijing last month. China has also started pilots for the use of e-CNY in cross-border transactions. Hong Kong is the latest testbed for international payments using e-CNY. Analysts tell Forkast the pilot in Hong Kong is in line with China’s overall strategy to have the former British colony serve as its bridge to the world.
The order prioritizes the protection of U.S. consumers, investors and businesses by ensuring privacy and data security and preventing fraud; protecting the United States and the global economy from financial instability, and “mitigat[ing] the illicit finance and national security risks posed by the misuse of digital assets.”
Biden set clear directives for U.S. cooperation with the G7, G20, and other international bodies and set a schedule within 120 to 210 days for various federal agencies to coordinate their efforts and produce reports and recommendations for regulation and policy on a broad swath of digital assets including CBDCs, decentralized finance and stablecoins.