With countries like China and Iran developing digital currencies, and many other nations already considering joining the party, there is a fear that fiat currencies, including the United States dollar, will be replaced in the future.
Those were thoughts expressed by two Members of the United States House of Representatives Financial Services Committee who wrote to the Federal Reserve regarding the possibility of the country creating a digital dollar.
In a September 30 letter directed to the U.S. Federal Reserve Chairman, Jerome Powell, by U.S Reps, French Hill and Bill Foster, the lawmakers expressed fear that the U.S. dollar might not be valuable in the future if any nation or a private company develop a widely accepted digital currency.
“We are concerned that the primacy of the U.S. Dollar could be in long-term jeopardy from wide adoption of digital fiat currencies,” part of the letter reads.
The Reps further acknowledged the fact that the nature of money is going digital, and as such, the Federal Reserve has to move with the trend and develop a “digital national currency.”
In another section, the Reps referred to the U.S. constitution that led to the creation of the Federal Reserve Act in 1913, where the U.S. apex bank is tasked with the mandate of developing a safer, more flexible and more stable monetary and financial system.
Since digital currencies have the potential to replace fiat currencies as evidenced by the over 40 countries exploring the possibility of issuing one, the lawmakers asked the Federal Reserve if there are plans to develop a digital dollar to match the growing trend.
In yet another section of the letter, the lawmakers labeled studies into the development of digital currency as ‘imperative’ for the Federal Reserve. They wrote:
With the potential for digital currencies to further take on the characteristics and utility of paper money, it may become increasingly imperative that the Federal Reserve take up the project of developing a U.S. dollar digital currency.
Will the U.S Eventually Tokenize the Dollar?
Notably, the current letter aligns with the advice given to the U.S. by different financial experts, prompting the nation to develop a digital dollar.
As Coinfomania reported last week, co-founder of Morgan Creek Digital, Anthony Pompliano stated that he would tokenize the U.S. dollar if he has the means to do so. Pomp had added then that countries would find it easier to buy a digital currency over fiat, and it would threaten the position of nations that fail to move with the trend.
