- A US Rep. Jim Himes has recently expressed his thoughts on Digital Dollar in a white paper.
- The document argues that the country should make a Central Bank Digital Currency (CBDC) and specifies what a digital dollar is.
- Where many countries have set up a CBDC, the US is yet to take a solid decision regarding Central Bank Digital Currency (CBDC).
In a recently published white paper, Jim Himes, a US Representative, argued that a digital dollar would support the greenback’s role as the global reserve currency. It could back the underbanked folks and be more reliable than other types of cryptocurrency.
The white paper, which is a fifteen-page document, further argues that the country should make a Central Bank Digital Currency (CBDC) and clarifies what a digital dollar is. And how they differ from the cryptocurrencies such as Bitcoin (BTC) or Tether (USDT), some of the requirements for the CBDC, and the differences between retail and wholesale CBDCs.
Furthermore, it also contrasted the anticipated safety of a digital dollar in comparison to the crypto assets. This paper is put forward amidst the downtrends that the overall crypto space has been witnessing. And the talks about potential CBDCs are constantly taking place within the Fed.
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According to the document, a US CBDC has benefits over the privately issued stablecoins and cryptocurrencies; moreover, the ability to be supported by the complete faith and credit of the US Government, like conventional cash, and would enable the holders with a degree of safety that might not be provided with the privately issued stablecoins due to the risk regarding the sponsors’ reserves.
It also highlighted that other countries are already thinking about issuing a CBDC. However, another question is that if a US CBDC should be intermediated along with its architecture.
The US Rep. suggests that a CBDC should utilize a semi-distributed base instead of a true blockchain or purely centralized backend. The third parties could access this network if they had a particular reason to.
Furthermore, the paper argues in favor of an account-based wallet system rather than a token-based one that has been advocated by groups such as the Digital Dollar project.
Even though many countries have already accepted or are establishing a CBDC, the US, a global economic power, is yet to conclude the case of a Digital dollar. It is to look forward to when actually the US would give clarity on it, issuing a CBDC.
Source: https://www.thecoinrepublic.com/2022/06/24/us-lawmaker-digital-dollar-would-safeguard-greenback-as-global-reserve-currency/