The Treasury Department intends to recommend that the federal government begin moving toward developing a digital dollar, allowing the United States to take significant steps toward adapting to the growing crypto industry and strengthening the dollar’s dominance in competing with China.
The establishment of a government-created digital token compatible with the cryptocurrency marketplace would occur if either the legislative or executive branches of government deemed them to be of “national interest,” according to CoinDesk. The report comes as the Treasury Department works on finalizing its report on crypto assets, which will elaborate on what actions the U.S. should consider to adapt to the economy, including the possibility of a central bank digital currency.
If the federal government does issue a central bank digital currency, it would have to be approved by the Federal Reserve Board of Governors, which has been studying the possibilities of such technology since January. The Department of Justice will also determine whether such a currency needs a new law once it issues its crypto report.