Why hasn’t the US fully embraced the digital dollar?
- The US is still ambivalent on a digital dollar, despite President Biden's executive order pushing for research into a potential CBDC.
- Lisa Pollina, Board Member, Atlantic Council of the US, discusses the hurdles to CBDC adoption and contrasts China's embrace of CBDCs with the US's interest in cryptocurrencies.
While many countries worldwide are exploring the potential of Central Bank Digital Currency (CBDC), China continues to expand its e-CNY in the market. China introduced its CBDC to the world at the Olympic Games in February 2022. For its part, the US Federal Reserve is conducting research and strategic planning regarding the potential implementation of CBDCs, spurred on by Biden’s executive order. Despite these efforts, America has yet to make a concrete commitment to adopting a digital dollar.
In the US, the CBDC would be a third form of the US Dollar after paper and coins. CBDCs are considered fiat currencies of a particular nation (or region) that are issued by – and regulated by – the overarching monetary authority of that country. Each CBDC is backed by the government that issued it and is part of the base money supply. The US Constitution determines what Congress can and cannot do to create and weigh money, and the Digital Dollar would be under that legal definition.
I spoke with Lisa Pollina, Board Member, Atlantic Council of the United States, about the hurdles in CBDC adoption, weighing the pros and cons. We also touched on China’s CBDC prevalence versus US interest in cryptocurrencies.
