A digital currency may allow countries bypassing traditional payment systems to engage in direct trade with US and reduce the role played by intermediaries such as banks.
Several people have said that a digital money could enable the US to default without defaulting. It could be possible for the US to pay its creditors in a way that does not violate institutional restrictions or sanctions.
Speculators have said that President Biden is delaying “the death of the dollar” until after the coming election and the FedNow digital dollar is the beginning of a cashless society, which they perceive as a threat to American citizens’ individual freedoms and privacy.
These speculations are not backed up by any credible evidence.
You can also read our conclusion.
The FedNow digital dollars could strengthen the US dollar in the near future, as international traders and investors may find it attractive to use agile cross-border transaction. A digital dollar can also prevent a currency crisis, and keep supply-demand channels open if the US defaults.
The first institutional crypto transaction will take place in…