US Falls Behind in Digital Currency Innovation

The US has failed to keep pace with other countries exploring digital versions of their currencies, according to an Atlantic Council study.

The Central Bank Digital Currency Tracker revealed the number of countries closing in on digital currencies has increased from 35 in May 2020 to 134, now representing 98% of the global economy.

Over half (51%) of countries are in the advanced development, pilot or launch stages of digital currencies, including all G20 countries except for Argentina.

However, progress of the creation of a central bank digital currency has stalled in the US, further widening the gap between the US and G7 banks, including the Bank of England and Bank of Japan.

The think tank noted digital currency has become an issue in the run-up to this year’s presidential election, with several candidates speaking out against its development.

President Joe Biden ordered officials to look into a digital dollar in 2022, but his Republican rival Donald Trump has vowed not to allow it in his presidential campaign.

In January, the Atlantic Council said the US’ progress on digital currency has stalled because technological payments innovation inside the Federal Reserve is lagging behind its peers and competitors.

According to the Atlantic Council, the FED should assess the resources available within the organization for research and development to advance progress.

For example, the People’s Bank of China has more than 300 people dedicated to working on digital currency, whereas across the US Federal Reserve system there is fewer than 20 people.