The digital dollar has been in speculation for a long time now. Many officials from the United States Securities and Exchange Commission have spoken about it in the best, but there has been no conclusive decision yet. The confusion gets further intensified as U.S. Treasury Secretary Janet Yellen talks about the problems of making the digital dollar a reality. The major problem pertains to a lack of agreement among all the different branches of the United States government.
A digital dollar would require agreement and consensus among all authorities since it will be a digital equivalent of the US dollar. Since it would not be decentralized like cryptocurrencies, the requirement for a legal framework is much more. At the same time, such a governmental venture would not get inputs from various third-party sources. That would make the task of making the digital dollar a reality even more improbable.
Central Bank Digital Currencies (CBDCs) are at the forefront of global economic discussions now. While the idea is still at its nascence, many countries have come up with digital versions of their official currency. Many other countries are also planning and collaborating on the same. The advantages of CBDCs are most glaring with respect to money transfers, especially cross-border money transfers. Under traditional setups, these transactions are both costly and time-consuming. CBDCs have the potential to change it, as they can cut processing costs by a great margin. If the United States decides to come up with the digital dollar, it will be a breakthrough event for the technology.