The United States is currently working on the development of a digital dollar, however, it is unlikely to be launched in the near future, according to Bank of America. In a recent report, analysts led by Alkesh Shah stated that while central banks for 67% of countries are exploring central bank digital currencies (CBDCs), which represent 98% of global gross-domestic product, the US Federal Reserve (Fed) has not yet committed to issuing a CBDC without the necessary support from the executive branch and Congress.
Central bank digital currencies (CBDCs) are digital currencies issued directly by a country’s central bank using a centralized ledger, operating as tokenized versions of its existing fiat currency. Currently, 33% of countries are already in the advanced stages of developing their CBDCs.
Regarding the political landscape in the United States, support for CBDCs has fallen along partisan lines. While Democrats have defended CBDCs for their potential to strengthen the global supremacy of the US dollar, Republicans in both the House and Senate remain hostile, seeing them as tools of the “surveillance state.”
The Federal Reserve’s position on CBDCs has been relatively neutral thus far. Vice-chair for Supervision Michael Barr stated that the central bank is discussing with experts on how to build the best infrastructure for a sovereign-backed digital dollar, but no final decision on issuance has been made.
