US president Joe Biden has ordered the White House to study the digital currency, with special attention to the risks it could pose to investors.
On Wednesday, President Obama has signed an executive decree directing agencies throughout all federal agencies to collaborate efforts to assess the advantages and dangers associated with cryptocurrency ownership and the possibility to develop the first American electronic currency.
Cryptocurrencies, as well as digital assets, have seen a surge in popularity in recent years. They have surpassed $3 trillion in November, as per the White House fact sheet. Around 16 percent of American adults, which is roughly 40 million have made investments in, traded in, or utilized cryptocurrency, the administration stated.
The White House added that the order will direct various government agencies, such as Treasury and Commerce departments, Commerce and Treasury departments, to work together in coordinating the federal approach to regulating digital assets.
The new project of digital dollar
The first idea to be that was launched by the Biden administration included the “digital dollar,” which is a digital currency that was created using a private blockchain that is managed by the state. The pledge to be cautious in regard to the numerous dangers associated with this technology, Joe Biden asked his team to create “Essential for the development and research of a potential digital currency of the central bank” (CBDC, “digital currency of the central bank”) The United States. The press release outlines 6 “priorities” to be followed. In addition, the US Federal Reserve has already started its project looking to accelerate the studies and developments.
How the Russian-Ukrainian war accelerates the development of the digital dollar and the regulation of cryptocurrencies?
The recent rise in the electronic dollar is believed to be closely connected to the geopolitical environment. This is turning the war triggered by Vladimir Putin in Ukraine upside down. Infected by a cascade of economic sanctions, Russia intends to find alternative ways to be excluded from the international financial system (Swift as a transfer service, Visa, Mastercard for payments, and more.) and markets.
In the backdrop of repression, Moscow is moving closer to Beijing. In addition, China is among the leading states in the control of electronic currency with its electronic CNY. The cryptocurrency that is the official currency of the second-largest economy also was widely criticized in the 2022 Olympic Games in Beijing, which allowed payments in lieu of a US visa.
This option lets the state control the exchange within its own market. It could also entice Moscow earlier than anticipated as it relates to sanctions. In 2022 it was announced that the Russian central bank will also launch the first of its experiments with the banks of the country in the ruble digital format.
Russia isn’t the only country looking to eliminate the dollar. As per the White House, more than 100 countries are contemplating having a go with cryptocurrency. El Salvador, dependent on the dollar, has also declared the legalization of bitcoin in 2021.
Confronted with dollars that might be less significant in an increasingly digital world and due to the appearance of new alliances, Washington has opted to speed up.