Speaking at a conference in Texas, the U.S. Treasury Department's Assistant Secretary for Financial Institutions, Graham Steele, has shared the institution's stance on a potential central bank digital currency (CBDC), or a digital dollar. Steele said the main challenge regarding a retail CBDC would be minimizing illegal transactions while protecting user privacy. The Treasury official added that the considerations about how to maintain user privacy should go on. - Steele also stated that a retail CBDC could promote a competitive payment environment and provide a safer alternative for consumers during bank runs.
- The government official underlined that access to alternatives outside of the banking system could have changed the nature and speed of bank runs during the recent U.S. banking crisis.
- Besides, Steele pointed out that the U.S. has yet to make a final decision on whether it would issue a CBDC.
- However, the official said a Treasury-led group is currently evaluating the potentiality of a digital dollar in many aspects, including national security, consumer privacy, illicit finance, and financial inclusion.
In 2022, U.S. President Joe Biden signed an executive order for the federal government to explore the potential use cases and risks of a CBDC, igniting debates from many lawmakers in the U.S. - Most recently, Florida Gov. Ron DeSantis officially banned the use of a CBDC issued by the Federal Reserve (Fed), the central banking system of the U.S., as money in the state.
- While proposing the law, DeSantis cited the risks of hindering innovation and promoting government surveillance.
- A survey conducted by the Cato Institute also recently showed that most Americans are still skeptical about a potential CBDC, with only 16% supporting the idea.
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