The digital dollar will have the same value as the paper currency dollar. It is completely different from other cryptocurrencies as their value fluctuates a lot. However, some important questions regarding the digital dollar remain unanswered. It is not known whether it will be based on blockchain technology like bitcoin or whether it will be linked to any kind of payment card. Biden has asked agencies including the Treasury Department to study various issues related to it. However, Darrell Duffie, a digital currency expert at Stanford University, said it could take several years for the digital dollar to start being used if the government decides to move forward.
This can have a big impact on transaction fees. Transaction fees may be reduced or even eliminated, excluding banks, bank cards or apps that charge commissions on payments. Supporters of the digital dollar say it will help those who do not have bank accounts. In America, the number of such people is about five percent. With this, the government can in a way have access to all the transactions. There are also risks like system failure or cyber attack. Apart from this, questions can also arise regarding privacy because the government will have information about all transactions.
The digital dollar could damage the banking system. Banks use deposits of customers to give loans. In the event of a digital dollar, they will have less funds. This can facilitate international fund transfers. Foreign exchange experts say that this can take up to an hour for such transactions which take up to two days to get valid. <!–
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