The United States is taking another step toward creating the central bank digital currency (CBDC). According to Nellie Liang, Under Secretary of Treasury, a consortium of several government agencies will come together in the coming months to discuss and further explore the adoption of CBDC.
Central bank digital currency is usually defined by Federal Reserve as “digital liability of a central bank that is widely available to the general public. “The CBDC has the same function as physical currency, allowing payments for services and goods. It differs from cryptocurrency because it is issued by central banks, guaranteeing its stability.
According to Liang, the adoption of CBDC would have numerous advantages for the U.S. economy.
“We are thinking about whether a U.S. CBDC, to the extent it has functionality that traditional forms of central bank money lack, could help to preserve the dollar’s global role,” Liang said on Wednesday during an appearance at the Atlantic Council. “We are also thinking about whether a U.S. CBDC could help reduce undesirable frictions in cross-border payments or other activities.”
Currently, six central banks are issuing digital currency, including the central banks of China, Jamaica, Nigeria, Bahamas, India, and the Organization of Eastern Caribbean states. It is believed that more than 80 other central banks around the world are thinking about doing the same.