INSUBCONTINENT EXCLUSIVE:
US president Joe Biden has ordered the federal government to look into creating a digital dollarUS president Joe Biden has ordered the
federal government to look into creating a digital dollar, a move with the potential to reshape how money is moved and used around the
world.Before his order results in a virtual greenback, there will be numerous major impacts -- and risks -- to consider first.Here are some
bills and coins used now, but in a digital form that is accessible to everyone, not just financial institutions.Unlike money deposited in a
same time, the digital dollar would be worth the same as its paper counterpart, a divergence from cryptocurrencies which currently have
highly volatile valuations.Key questions remain unanswered, like whether a digital dollar would be based on blockchain technology like
bitcoin or if it would be linked with some sort of payment card.Biden is asking agencies, including the Treasury Department, to examine
various issues on the topic.If the government decides to go ahead, it could take "a number of years" before we can use a digital dollar --
authorities will have to explore for instance which technology to use, said Darrell Duffie, a digital currencies expert at Stanford
five percent of households in the United States, and could make it easier for the government to pay benefits.There are risks like a system
failure or a cyberattack, and there are also questions about privacy, as the government could theoretically have access to all
transactions.The banking system could also be undermined as banks currently use customers' deposits to lend to others, and with a digital
dollar they could have less money at their disposal.How will global finance be affected?International transfers, often slow and expensive to
make, could be greatly eased.An operation that currently takes two days to be validated could be done in one hour, said Marc Chandler, a
foreign exchange expert for the broker Bannockburn.For Mr Chandler, the geopolitical role of the US dollar would not be upset by the digital
version's introduction.A digital dollar would represent "a natural evolution rather than a revolution", he noted, recalling that more than
$6.5 trillion are already exchanged in electronic form every day on the foreign exchange market.Even if China launches a large-scale digital
yuan, as is being discussed, he said he doesn't think that changes China's role in the world economy as "there will always be questions of
trust, transparency, depth of markets."For Stanford's Mr Duffie, however, if the United States wants to continue to benefit from the
dollar's status as the dominant currency in central bank reserves and international payments, it is essential that the government tread
on digital versions of their own currencies, from the eurozone to India, but "there is no evidence to suggest being first to market provides
consequences, low usage or other issues can undermine faith in the issuing institution, he noted."The overwhelming dominance of the dollar
gives the US the luxury of learning from..
digital dollar could be more preferable for domestic use than a cryptocurrency, said Mr Duffie.For international transfers, however, he said
he was "skeptical that large central banks like the Fed or the ECB, China or Japan, will give accounts at the central bank to people all
