The US dollar could go digital. Here’s what you need to know

As technology continues to revolutionize the way people live, work and spend, central banks around the globe have kicked off efforts to reinvent their local currencies for the digital era. Now, the United States is the latest to signal “urgency” in researching a potential digital version of its dollar via a Central Bank Digital Currency, or CBDC.

Part of President Joe Biden’s executive order regarding digital assets on Wednesday includes “placing urgency on research and development of a potential United States CBDC, should issuance be deemed in the national interest,” according to an accompanying fact sheet released by the White House.

China, the world’s second-largest economy by gross domestic product, soft-launched its digital renminbi in January and the CBDC already boasts more than a hundred million users. All told, around 100 countries are exploring CBDCs at one level or another, International Monetary Fund managing director Kristalina Georgieva said during remarks at the Atlantic Council think tank last month.

“We have moved beyond conceptual discussions of CBDCs and we are now in the phase of experimentation,” Georgieva said. “Central banks are rolling up their sleeves and familiarizing themselves with the bits and bytes of digital money.”

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