USA creating Digital Dollar

USA creating Digital Dollar

Team Ambitiousbaba are here with a Current Affairs Special Series. In this series, candidates will be introduced to current affairs topics daily, which will not only improve their general awareness but also will ensure that the candidates do not lack in any current affairs topic. Today’s Current Affairs topic is “USA creating Digital Dollar”

US President Joe Biden gave his order to the federal government to check out on the creation of a digital dollar. This step is a move with the possibility to reshape how money is moved and used around the world.

Here it is to be noted that there will be numerous major impacts and risks in results in a virtual greenback which must be considered first.

Form of Digital Dollar:

As dollar issued by the US Federal Reserve central bank like all US bills and coins used now the digital form would be accessible to everyone, not just financial institutions.

It will be registered in the accounts of the Federal Reserve and not in a bank as money deposited in a bank account or spent via apps like Venmo and Apple Pay.

The digital dollar would be valued as equal as its paper counterpart but it will be a different from crypto currencies which currently have highly volatile valuations.

Confusion with unanswered:

There is a key questions which are remaining unanswered such as whether a digital dollar will be based on block chain technology like bitcoin or if it would be linked with some sort of payment card.

Aim of launching digital dollar:

It would reduce or even null transaction fees as exchanges would no longer go through banks, cards or apps that collect commissions on every payment.

Advantages and Disadvantages:

Advantage: It would assist people without bank accounts and the government can give benefits about five percent of households in the United States easily.

Disadvantage: There disadvantages in jeopardizes like a system failure or a cyber attack, question about privacy because the government could theoretically have access to all transactions.

The banking system could also be weakened as banks currently use customers’ deposits to lend to others but after digital dollar launched banks might be have less money at their disposal.

How will global finance be affected?

International transfers which are slow normally and expensive to do, it would be eased.

Question & Answer:

Q1. Who has gave official orders to check for digital dollar system?

Ans. Joe Biden

Q2. US Dollar and coined is currently issued by which entity?

And. US Federal Reserve

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