President Joe Biden of the United States of America has signed an executive order directing the government to examine the risks and benefits of cryptocurrencies, putting a premium on research and development of a possible digital American dollar.
"Digital assets, including cryptocurrencies, have grown at a breakneck pace in recent years, surpassing a USD3 trillion market cap last November," the White House stated in a fact sheet, adding that approximately 16 percent of adult Americans, or approximately 40 million people, have invested in, traded, or used cryptocurrencies.
"While the rise of digital assets presents an opportunity to reaffirm America's leadership in the global financial system and at the technological frontier, it also has significant implications for consumer protection, financial stability, national security, and climate risk," the report continued.
The executive order signed on Wednesday establishes a national policy for digital assets centred on six key objectives: consumer and investor protection; financial stability; illicit finance; US leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation, as per reports.
Meanwhile, the order directs the American government to assess the technological infrastructure and capacity requirements for a potential Central Bank Digital Currency (CBDC) and encourages the Federal Reserve to continue its CBDC research, development, and assessment efforts.
"We are prioritising the assessment of the potential benefits and risks of a digital dollar for payment systems, financial stability, and national security," a senior administration official told reporters.
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