CBDC: U.S. in no hurry to adopt the digital dollar

The top official at the U.S. Treasury Department, Nellie Liang, said the federal government is in no hurry to launch its central bank-issued digital currency (CBDC) – the “digital dollar“. Nellie Liang, who is undersecretary for domestic finance at Treasury, revealed this in an interview with Bloomberg on Wednesday.

She said the nation’s regulators must first determine whether the digital dollar will somehow help enable fast and inexpensive interbank payments in real time. Interestingly, the U.S. Federal Reserve already wants to introduce real-time interbank payments next year.

In addition, Nellie Liang suggested that the adoption of a CBDC by the United States could still take several years. Perhaps as long as five years or more. She believes that within that time frame, many other countries should have introduced their CBDCs, which could prompt the United States to adopt one as well.

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Overall, she insists that the U.S. government will study CBDC carefully to prepare for a need that does not yet exist.

Does the postponement of the adoption of the digital dollar threaten the international status of the U.S. dollar?

It is worth mentioning that while the United States is still struggling to develop its digital currency, China has so far piloted the digital yuan in at least 15 provinces. Even more, it has also piloted the digital yuan in a multinational financial network.

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For some financial experts, China is poised to become the benchmark for digital currency. This essentially means that the dollar’s place as the world’s reserve currency could be under threat right now.

At the same time, Nellie Liang also had something to say about the potential of a digital dollar defending the dollar as a reserve currency. She stated that the U.S. dollar’s place as the world leader does not come from a specific technology. She stated:

“It comes from our system of governance, the rules that govern our financial markets, our rule of law and the safety and soundness of our institutions.”

Without a doubt, the U.S. government is in no hurry to issue a CBDC. But when it is finally ready, the Fed will do so in cooperation with Congress and the executive branch.

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