The U.S. Treasury Department plans to advise the federal government to issue a digital dollar, though it will only officially sign off if there’s a government signal that it’s “in the national interest.”
The question of national interest will come down to specifics from the Biden administration as well as possible action by Congress, CoinDesk wrote, citing unnamed sources.
The decision is murky, though, because of the question of whether U.S. legislators have to pass a law to authorize the federal reserve to make a central bank digital currency (CBDC).
An executive order from President Joe Biden in March called for crypto recommendations from numerous corners of the federal government, and many of them have come due since then. There’s expected to be a document from the Treasury on how to handle the digital dollar in the next few days. It’s eagerly awaited because issuing the token could have big implications for how customers deal with traditional banks.
But Fed Chair Jerome Powell and other senior officials have said the central bank wouldn’t issue anything official without support from the administration and Congress.
And according to Fed Vice Chair Lael Brainard, even if Biden, Congress and the Fed come to a decision, it might take as long as five years to design and launch one, which would give the crypto industry time to establish alternative, private stablecoins.
Powell made comments recently about stablecoins, saying that they’d likely need to be appropriately regulated.
PYMNTS wrote that he called perception the biggest issue in some ways.
“If people are going to think something is money, then it needs to actually have the qualities of money,” Powell said. “If it doesn’t, then I don’t think you want to take money and make it into just another consumer product where sometimes it fails and sometimes it’s good.”