U.S. Treasury Begins Study of Digital Currencies and Blockchain

The U.S. Treasury, in parallel with the Federal Reserve, is conducting research into the use of the digital dollar. This was stated by Deputy Treasury Secretary Justin Muzinich during an онлайн-семинара, dedicated to the future of the economy.

Muzinich explained that the rising interest in national digital currencies (CBDCs) stems from their potential to circumvent sanctions and existing mechanisms such as anti-money laundering and counter-terrorist financing.

“Distributed ledger technology can enhance efficiency and reduce costs. It is important that the government encourages innovation rather than fears it,” the official said.

The deputy secretary of the Treasury noted that implementing a CBDC could entail a sharp change in the money supply or financial disruptions if hackers gain access to its issuance.

Destabilisation could also occur in the event of changes to the basket of reserve currencies or a shift of stablecoins from a full-reserve to a partial-reserve model.

China intends to outpace other countries and be the first to issue a CBDC, including to displace the dollar on the global stage.

Earlier, ForkLog reported that the People’s Bank of China conducted tests of a digital yuan-based payment system in a pilot of 3.13 million transactions worth 1.1 billion yuan (about $162 million).

At the end of September, several Federal Reserve regional banks joined the Fed’s CBDC study initiative.

In August it became known that experiments with a hypothetical digital dollar by the Boston Fed and MIT had begun.

Read about central banks’ work on creating CBDCs in ForkLog:

How and why central banks are creating digital currencies (CBDC)

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