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What is the Digital Dollar Project, Which US Plans to Launch?

The United States plans to launch a digital dollar or us digital dollar, which will be the central digital currency of the US Dollar, which will be managed by the government.

The evening of Wednesday 09/03/2022, an American official for the New York Times, said the digital dollar was started before the Ukraine war.

This comes after the White House announced Wednesday that US President Joe Biden, later launched a new white paper by the Digital Dollar Project within wide-scale efforts to impose controls on the encrypted currency sector.

Vice President of the Federal Reserve Louis, David Andolfatto, said the digital dollar "Fedcoin", will allow financial transactions without having to open a bank account, explaining that the digital dollar will work through the use of an application on the mobile phone.


us digital dollar


The United States is Working to Launch a digital dollar

The White House said US President Joe Biden, later launched a digital draft within the framework of large-scale efforts to impose controls on the encrypted currency sector. Biden will sign Wednesday as a decree, in which he is asked to pay utmost importance to research and development in order to reach a digital currency of the Central Bank in the United States, which is dominated by the world's money sector.

"We must rescue in our analysis because the impact of a digital dollar will be very deep in the country, which is considered its main reserve currency in the world," he said.

But he stressed that the advancement of advanced digital currency in some other countries or cash regions does not threaten the dollar's dominance, which included a special location for the United States in the global financial sector.


The global demand for encrypted currencies, such as configuring and increasing use of digital reparations, has raised attention to adopting a formal digital currency, while major central banks in the world are considering this possibility.


What is digital dollar?

Us digital dollar can be defined as a central digital currency for the US Dollar, and the United States is heading for issuance, with immediate electronic payments between individuals and companies without the need for brokerage and the role played by banks.

The digital dollar is characterized by a low level of volatility since its value is equal to one dollar, as well as its effectiveness of storing the information needed to conduct any commercial process in a digital portfolio, as this information is encoded on payment in the same symbol when paying.

The digital dollar is also characterized by global and easy access, as it can be used across borders and local business processes.


Digital Dollar vs Bitcoin

Us digital dollar may appear when presented to an encrypted currency competitor, despite the difference in operating mechanisms compared to the currency of bitcoin for example.

Noah Smith, a Bloomberg writer said that "Fed's Digital Dollar Would Look Nothing Like Bitcoin".

"These are all advantages of an electronic currency run by the central bank. But it’s crucial to note that none of these features need to employ the kind of decentralized process that enables Bitcoin. (Full disclosure: I own Bitcoin and other cryptocurrencies.)", he said.

One of the most prominent differences and differences between us digital dollar and bitcoin is that the digital dollar does not need to use decentralized operations that enable bitcoin from trading, where the bitcoin was designed to work without the need for a reliable broker, such as the bank when they are Two people carry out a dollar treatment, the bank is achieved from the transaction and records, and is confirmed by a deduction of money from a calculation and its limitation in another account.

But when you use Bitcoin this verification is made instead via a network distributed by computer, called bitcoin mining.

The economies of the system competing for the 'min skirts were for verification of treatment, and these workers are rewarded through the Bitcoin currency to do so, is the process that maintains the reliability of the entire system.

However, this process also requires enormous resources, and the mining process, which is called "proof of work", requires very difficult computational problems.

It is clear that the digital dollar federal reserve is not needed to establish its work proven system for a "Fedcoin" currency. Huge quantities of electricity to re-confidence every time someone wants to spend a digital dollar.

But instead, it can resolve the transaction as any bank, at a simple and easy cost, and as long as people trust that the Fed will not steal their money, the federal reserve system can be cheap without relying on any encrypted currency technology.


Why does the US Need to Issue a Digital Dollar Project?

Former President of the CFTC, Christopher Giancarlo said that the United States needs to intensify its research in the digital currency issued by central banks.

This comes, while the federal reserve digital dollar is conducting its own research and experiences on technology and the use of the Digital Dollar issued by the Reserve.

Christopher Giancarlo, who is currently working with Accenture Consultancy on pilot programs, will test different use of Dollar Dollar in the United States, known as the Dollar Dollar project, according to Yahoo finance.

Giancarlo said the current work of the Fed was focused on the infrastructure structure, while the Digital Dollar project aspires to test, how to interact the private sector with different dollar dollars, among other things.

And he said the United States needed to be in the introduction of 'digital currencies issued by central banks.

Federal Reserve officials stand on whether they will eventually build a digital dollar or not. While Federal Reserve Chairman Jerome Powell said that while one of the advantages 'most attractive' for the digital dollar is to improve financial inclusion, he still has questions about how he has affected the banking system and financial stability.


What is the Impact of the US Digital Dollar on Other cryptocurrencies?

The news of the launch of us digital dollar led to calming the concerns of co-workers encrypted on an immediate regulatory campaign on encrypted currencies. Bitcoin currency rose 9.1 percent during trading to $ 42,280, on its way to achieving the largest percentage for cent since February 28.

Follow cryptocurrency prices from here.

US administration officials said that large-scale control over the coins, which exceeded three trillion dollars in November, was necessary to ensure US national security, financial stability, and the competitiveness of the United States and to see the growing threat of electronic crimes.

Analysts see the long-awaited executive order as recognition of the growing importance of encrypted currencies and their potential consequences for the United States and the global financial regulations.

The American economic advisor for International Economics Daleep Singh said in an interview with CNN, that the trades of cryptocurrencies have seen significant growth, and this affects how people use future banking services, and if they are safe and protected from volatility American in the global economy.


Conclusion

An official said one of the main goals of the US Digital Dollar was to address the shortcomings of the current US payment system and strengthen financial inclusion, especially for poor Americans, whose five percent of them do not have bank accounts because of high fees.

The US administration attaches great attention to how to go ahead in the development of a digital dollar, given the role of the dollar as a basic reserve currency in the world.

While nine digital banks have been launched, 16 other countries started - so China - to develop such digital assets. What some in Washington paid to concern that the dollar loses some dominance for Beijing.

But the US dollar is still supported by basics, including transparency, the vote of the Federal Reserve, according to US officials.

Executive requires the preparation of twelve reports by several bodies, including the Securities Commission and the Financial Consumer Protection Office, to assess problems with cryptocurrencies, including regular risks and consumer protection.




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