The US Federal Reserve is thinking of its digital currency
The US Federal Reserve is thinking of its digital currency

The Federal Reserve has taken a step toward developing a digital currency and announced that it will publish research on the topic.

The aim is to gather public opinion and allow the United States to play a leading role in setting international standards, Fed Chairman Jerome Powell said in a video message.

In order to facilitate a full dialogue, the Federal Reserve released a discussion paper this summer outlining our current positions toward digital payments, with particular attention to the benefits and risks of central bank digital currencies in the American context.

As part of this process, the Federal Reserve requires public advice on issues related to payments, financial inclusion, privacy, and information security.

The advertisement takes the concept of digital dollar from a small research project to a larger project. The Federal Reserve wants to study how a central bank digital currency or central bank digital currency can adapt to the US banking system.

At the same time, the Federal Reserve could try to accelerate the development of a potential US digital currency while other countries (China in particular) move steadily toward this goal.

Last December, China announced that some users could use the reward digital dollars in sweepstakes-like experiences.

The digital currency is not only a tool of international soft power, but it is also seen as a way for China to strengthen its monetary system.

To that end, Powell indicated that while the United States is not yet ready to draw conclusions about the digital dollar, the United States is likely to play a leading role in shaping international standards for central bank digital currencies.

However, it will take some time as this decision will require serious consideration and analysis by the public and elected officials.

As the central bank explores digital currencies, governments are mobilizing to strengthen control over cryptocurrency assets.

Many of the regulatory issues related to digital currencies involve taxes.

The US Internal Revenue Service (IRS) this year improved its ability to track taxpayers who own cryptocurrencies by examining how cryptocurrency platforms operate and threatening to confiscate the assets of tax evaders.

The US Treasury Department stated that following recent signs of imminent regulatory action in various cryptocurrencies, transfers of $ 10,000 or more should be reported to the US Internal Revenue Service.

The proposal is part of the Biden government's comprehensive tax compliance plan. According to the Treasury Department, the total difference between taxes paid and taxes owed is about $ 600 billion in 2019. If not resolved, it could rise to $ 70,000.1 hundred million.

The Treasury Department has warned that cryptocurrencies are a major disclosure issue by promoting illegal activity, including tax evasion.

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