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Op-ed: Why a digital dollar could be just what the economy needs

Key Points Two former leaders of the U.S. Commodity Futures Trading Commission (CFTC), J. Christopher Giancarlo and Daniel Gorfine, argue for the potential benefits of a digital dollar ahead of a Senate committee hearing on the topic.

They argue that digital currency could draw younger and underbanked users into depositing money into commercial banks and reduce friction for electronic payments for both consumers and businesses.

They also suggest that as long as digital currency is coming anyway, it’s best to have it backed by a country with “stability, the backing of a robust and strong economy, good governance, openness, and rule of law.”

Calls for a digital dollar have been on the rise. On Wednesday morning, the Senate Banking Committee Economic Policy Subcommittee under Senators Warren and Kennedy will hold a hearing on the challenges and opportunities of a Digital Dollar. The hearing will undoubtedly note the recent speech by Federal Reserve Governor Lael Brainard outlined potential advantages of a U.S. central bank digital currency (CBDC), including with respect to access, inclusion, and efficiency, and next steps in the Fed’s analysis. It will also note the speech the week before by Sir Jon Cunliffe, deputy governor of the Bank […]

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