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The trade race: US launches pilot digital Dollar in response to Chinese counterpart

Following the wide-spread tests of China’s digital Yuan, the US is starting to follow up on blockchain based money

Following the already advanced Asian  projects of CBDCs, Central Dank Digital Currencies based on blockchain, the US has launched testing of a digital Dollar. The Digital Dollar Project, DDP for short, can be understood as counter towards Chinese ambitions to establish the digital Yuan as the new world’s top currency.

Five digital Dollar pilots will be entering testing phase over the next year, led by the Digital Dollar Project, the Digital Dollar Foundation and Accenture. Notably, these organizations are all part of the private sector.

The innovation of centralised cryptocurrencies issued by nation states saw its start in the Bahamas last autumn, where the so called "Sand Dollar“ is already in full use.

Since then, several Asian countries have conducted tests of their own digital currencies, including Japan, South Korea, Thailand and, with a respectable head start, China. Speculations are, that the digital Yuan of China will be released in 2022, conveniently coinciding with the Beijing Winter Olympics.

us plansNevertheless, the DDP is not intended to be the top currency by making a speedy entrance. Instead, US Federal Reserve Chair Jerome Powell stated in a press conference on April 28 that it is "far more important to get it right than it is to do it fast or feel that we need to rush to reach conclusions because other countries are moving ahead.“

Powell is confident that the US‘ advantage of currently having the world’s most powerful currency, will enable the digital Dollar to maintain an equally leading position, once it is fully optimized.

Additionally, the digital Dollar is aiming towards a design that ensures more privacy, a topic in which the Chinese counterpart was heavily criticised for. The Asian currencies are mostly controlled by government and state institutions while the introduction of the digital Dollar will be led by the private sector.

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