Experts say physical banks could be a thing of the past if the US creates a digital dollar


President Joe Biden has ordered the Treasury Department to consider creating a government-regulated digital dollar.

AUSTIN, Texas — If the United States went ahead with creating its own digital dollar, banks as we know them might be a thing of the past.

Last Wednesday, President Joe Biden directed the Treasury Department to consider creating a government-regulated digital dollar.

“It would probably be as simple as opening an app, and you can have banking services, including loans,” said Peter Rodriguez, dean of Rice University’s School of Business.

Rodriguez said digital currency is unlikely to replace the physical dollar, but will cut out the middleman, the banks.

“If there is another way to buy and sell things without putting our money in the bank, where are the banks going to get the money to lend?” asked Craig Pirrong, professor of finance at the University of Houston. “So that’s one of the concerns expressed by the Fed.”

The two educators said Bitcoin and the digital dollar are similar but different in many ways. Perhaps one of the biggest differences is that Bitcoin is unregulated and the US digital currency would be regulated.

“But unlike Bitcoin, Bitcoin is available in limited and capped quantities. The government could create as many as they want,” Pirrong said.

Bitcoin’s value changes often, but a digital dollar could be pegged to the actual US dollar, making its value more stable.

Rodriguez said that if a standard cryptocurrency were to compete with US digital currency, some wouldn’t last very long.

“It’s possible that as a result of this order you may see some cryptocurrencies no longer being viable,” Rodriguez said. “Everyone will move to hold the most stable, most viable long-term, and that means they could lose on some of those investments.”

This process is still in its infancy. Over the next few months, federal agencies will examine the risks and benefits of cryptocurrency.

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