The United States is likely only a few years away from implementing a national digital currency, according to analysts at Bank of America.
The idea of a digital coin issued by the US government, known as Central Bank Digital Currencies (CBDCs), has gained prominence in recent years alongside the rise of major crypto tokens such as Bitcoin, which is not tied to any government institution.
U.S.-backed digital coins “are an inevitable evolution of today’s e-currencies,” Bank of America crypto strategists Alkesh Shah and Andrew Moss wrote in a client note on Monday, according to Bloomberg.
The first US digital dollar could be issued between 2025 and 2030, the strategists added.
The Federal Reserve has released the findings of a study assessing the pros and cons of a US digital currency. The central bank has invited public comment until May 20 on the concept, as it examines whether a digital coin “could improve the safe and efficient national payment system.”
“We look forward to engaging with the public, elected officials, and a wide range of stakeholders as we consider the positives and negatives of a central bank digital currency in the United States,” the Fed Chairman said. , Jerome Powell, in a press release.
Meanwhile, President Joe Biden is expected to issue executive orders directing multiple agencies to develop a federal cryptocurrency strategy, Bloomberg reported. Orders could arrive as early as February.
Bank of America expects more private businesses to use digital currencies in the coming years as they gain popularity for transactions.
“We expect the adoption and use of stablecoins for payments to increase significantly over the next few years as financial institutions explore digital asset custody and trading solutions and as payment are integrating blockchain technology into their platforms,” the analysts added.
As investors have piled into major cryptocurrencies in recent years, digital assets have proven volatile. After hitting an all-time high of $69,000 in November, bitcoin fell below $37,000 on Tuesday.