Digital Dollar: What It Is and How This Currency The US Government Operates In Could Work

US Treasury Secretary Janet Yellen noted this week that President Joseph Biden’s administration is supporting research into the viability of a digital dollar., as reported by Bloomberg news agency.

“It makes sense for central banks to look at the issuance of sovereign digital currencies,” Yellen said at a virtual conference hosted by the New York Times on Monday.

In this context, claimed that a digital version of the dollar could help remove barriers to financial inclusion in the United States among low-income households.

“Too many Americans lack access to convenient bank accounts and payment systems, and I think this is something a digital dollar, a central bank digital currency, could help with,” he noted. “It could result in faster, safer and cheaper payments, which I think are important goals,” he added.

The digital dollar is said to be a new form of money. It would be the digitization of the currency issued by the US Federal Reserve to free it from systemic risk without the need for an account with the bank.

It should be noted that several central banks, including the Federal Reserve of the United States, explored how the digital versions of their own currencies would work. Officials generally see opportunities and risks, and many central banks have slowly started to embrace the idea as China continues to test the digital yuan pilot program.

Too many Americans lack access to convenient bank accounts and payment systems, and I think this is something a digital dollar, a central bank’s digital currency, could help with (Janet Yellen, U.S. Treasury Secretary

The U.S. central bank announced last year that employees of the Federal Reserve Bank of Boston, along with MIT’s Digital Currency Initiative in Cambridge, Massachusetts, were conducting a study to build and test a hypothetical digital dollar.

Meanwhile, Yellen, He assured that bitcoin is still not an established payment method and is “an extremely inefficient way to make transactions.”

It should be remembered that Bitcoin rebounded on Wednesday thanks to favorable comments from a renowned investor, Square’s bet, Twitter’s CEO’s company adding more cryptocurrencies to its balance sheet and the promise of more monetary stimulus.

The volatile token found support in these elements that caused it to rise to 7.2% on the day to hit a daily high of $ 51,393 after a tough week dropping to $ 45,000 on Tuesday that casts doubts over the sustainability revived. profits of the past year.

Yellen wondered how much energy is consumed in processing bitcoin transactions. Cryptocurrency, for its part, is defended by its supporters as essentially a separate financial system, independent of central bank control and possible state-sponsored digital currencies.

The U.S. Treasury reiterated that, saying officials must first address a number of issues, including how a digital currency can affect traditional bank deposits, financial stability, consumer protection and illegal transactions.

There’s a lot to consider here, but it’s worth a look”, He assured.

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