The US Federal Reserve has taken a step toward developing a digital currency Advertise About plans to publish a research paper on this topic.
Fed Chairman Jerome Powell said in Video messageThe goal is to gather public comment and have the United States play a leading role in developing international standards.
To help spur widespread conversation, the Fed is releasing a discussion paper this summer that outlines our current thinking on digital payments, with a special focus on the benefits and risks associated with digital central bank currencies in the US context.
As part of this process, the US Federal Reserve is requesting public comment on issues related to payments, financial inclusion, data privacy, and information security.
The announcement takes the digital dollar concept from a small research project into something potentially bigger, and the Fed aims to explore how central bank digital currencies or central bank digital currencies fit into the US banking system.
Meanwhile, the Fed will likely try to accelerate work toward a potential US digital currency as other countries, especially China, are moving steadily toward this goal.
And last December, China announced that certain users could spend the awarded digital yuan on a lottery-type experiment.
The digital currency is seen as a way for China to strengthen its monetary system, in addition to being a tool of soft power internationally.
To this end, Powell stressed that while the United States has not reached any conclusions about the digital dollar, the United States is expected to play a leading role in developing international standards for central bank digital currencies.
But this takes time, as he added that the decision requires careful thinking and analysis from the public and elected officials.
As central banks explore digital currencies, governments are mobilizing to increase oversight over cryptocurrency assets.
A large part of the regulatory problem around digital money is tax-related.
The IRS this year boosted its ability to track taxpayers who own cryptocurrencies by investigating the operations of digital currency platforms and threatening to seize the assets of tax evaders.
And in the latest sign of regulatory measures looming across cryptocurrencies, the Treasury Department said it would require any transfer of $ 10,000 or more to be reported to the IRS.
The proposal forms part of the Biden administration’s comprehensive tax compliance plan, and according to the Treasury Department, the total gap between taxes paid and owed was nearly $ 600 billion in 2019 and could swell to $ 7 trillion if left unaddressed.
The Treasury Department has warned that cryptocurrency poses a major problem with disclosure by facilitating illegal activity, including tax evasion.
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