Biden Administration Was Keen To Launch Digital Dollar

Updated: 01 March 2023

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Last year when President Joe Biden was issuing an executive order regulating crypto, the White House was pushing toward a digital dollar. One of the former top executives for Biden, Daleep Singh, asserted to the U.S. Senators on February 28. He noted that the administration was pursuing a digital dollar to remove private cryptocurrencies. Additionally, enhancing ransomware and sanction violations, according to CoinDesk reports.

The White House was pushing toward a digital dollar last year when President Joe Biden issued his executive order on regulating crypto, according to one of his former top economic advisers.@jesseahamilton reports https://t.co/JWDA3VdiLS

— CoinDesk (@CoinDesk) February 28, 2023

Biden appointed Singh as the deputy director of the National Economic Council and deputy national security adviser at the National Security Council. However, during a Senate Banking Committee Hearing, Singh recalled serving under the Biden administration when it issued an executive order to facilitate U.S. regulation of digital assets. The executive order issued in March last year focuses on six areas: financial stability, consumer and investor protection, inclusion and accessibility, U.S. competitiveness, illicit activity, and responsible development.

However, the ex-Biden adviser noted that Biden’s executive order “was attempting to push our government to launch a digital dollar. It is the best step we could take because it would discard the crypto ecosystem that allows national security adversaries like Russia to utilize our deficiencies. Additionally, they could exploit our weakness in terms of our critical infrastructure.”

Singh was an acting assistant secretary of the Treasury and a senior Federal Reserve Bank of New York official. However, Singh quit in July from the government and joined PGIM Fixed income as its chief global economist.

The Feds say on the central bank.

Notably, the U.S. banking digital currency (CBDC) issued by the Federal Reserve could signal a shift in the banking industry and the crypto space. This includes its potential outcomes on non-governmental stablecoins, which may overrun a virtual dollar backed by the government. The U.S. Treasury Department, however, followed up since Biden’s executive order. It recommended that the Federal Reserve continue its CBDC research, experimentation, and evaluation. However, the reports suggested that no digital dollar should be created unless it is in the national interest.

It is not clear who decides what is in the national interest. However, the Feds will have a say because the central bank will manage it. It may require an order from the administration, as Congress may also be involved. Notably, the answer could be geared by a future legal interpretation from the Justice Department. It is expected to highlight the authorities the Federal Reserves require prior to issuing a digital dollar.

Noteworthy, Singh outlined that, to some degree, crypto enables U.S. opponents “to evade the impact of our sanctions.” He noted that such evasions might not represent a significant share of sanction violations. He added, “even a dollar evasion is not something we ought to tolerate.” On the other hand, various crypto enthusiasts have stipulated their comments concerning the digital dollar idea.

Digital Dollar

Some crypto enthusiasts include Wall Street lobbyists who have denounced the idea of the digital dollar as a threat to the financial system’s stability. However, the Office of Financial Research stipulated in July last year that the U.S. CBDC could alert the government to an early-warning system or signals of economic distress. The reports suggested that a highly developed CBDC may decrease rather than increase financial fragility.

Christopher Waller noted that parts of the crypto space should be encouraged to thrive as long as they threaten the U.S. banking system. Waller is a Federal Reserve Governor appointed by Biden. He notably opposed the idea noting that the Federal Reserve would have to supply and manage the digital dollar and a minimum of one of the board members. In his recent Global Interdependence Centre event in California, he noted:

The lack of overflows to date may be partly attributable to the relatively restricted number of interconnections between the crypto space and the banking system.

Additionally, Waller argued that letting the Fed for the U.S. digital currency (CBDC) is a brilliant idea.

On Tuesday, Sen. Elizabeth Warren (D-Mass) asserted that cryptocurrencies are being used to control U.S. businesses for ransom. However, Singh addressed crypto questions spitted to him by Sen. Warren. Warren noted that:

It is being used to do away with America’s sanctions and to evade America’s adversaries. We’ve got to stop helping these guys by letting crypto go unchecked.