President Joe Biden plans to sign an executive order on Wednesday to study the concept of a “digital dollar” currency to compete with Bitcoin.
“We’re placing the highest urgency on the effort to assess the potential benefits and the risks of a digital dollar on payment systems, on financial stability, on national security, on the implications for human rights, and financial inclusion,” a senior administration official told reporters in a briefing call on Tuesday.
A digital dollar would be easier for the federal government of the United States to control than cash but make it more susceptible to inflation and government controls than open-source currencies like Bitcoin.
Bitcoin is trusted by users for not being susceptible to government control, allowing it to exist without government interference in changing the supply or seizing or freezing assets.
Biden officials stressed that the executive order marked the first time that the United States brought together “a coherent and coordinated view” on digital currencies “at the very highest level of government.”
“The president articulating his views about what our interests and concerns are in this space. In fact, that is notable in and of itself,” one official said.
Biden officials stressed a digital dollar would help the United States compete with other digital currencies.
One official said:
The primacy of the dollar — the U.S. dollar — it’s underpinned by fundamental advantages that the United States has held for a long time and continues to hold: credible and longstanding commitments to transparency, our rule of law, the contractual obligations and rights that everyone enjoys, the deepest and most liquid financial markets in the world, sound economic governance, and the full independence of our Federal Reserve system.
The Biden team revealed they had created “Crypto Sundays” events to coordinate with industry experts on moving forward to create the government’s own version of a digital currency.
One official defended the idea of a “digital dollar” in terms of social justice, noting that Americans “facing issues with financial inclusions” could use U.S. government currencies without the struggles of meeting requirements from existing banks, credit cards, and financial institutions.
“There’s at least potential here to try to address a very serious problem that mainly affects, you know, lower-income, middle-class Americans,” the official said.
The Bank of England has called on ministers to discuss whether or not a central bank digital currency should be “programable,” allowing governments to control its use.
“You could introduce programmability – what happens if one of the participants in a transaction puts a restriction on [future use of the money]?” Tom Mutton, a director at the Bank of England, said according to The Telegraph.
“There could be some socially beneficial outcomes from that, preventing activity which is seen to be socially harmful in some way,” he continued. “But at the same time, it could be a restriction on people’s freedoms.”