Bank of America Says Digital Dollar Complexity Delays Timeline

Bank of America strategists are revising an earlier prediction that the U.S. would issue a digital dollar by the end of the decade.

According to a Bloomberg News report Friday (Sept. 23), BofA strategists Alkesh Shah and Andrew Moss say earlier projections that the digital dollar would be unveiled between 2025 and 2030 were too optimistic, as the concept was still being studied.

“An extensive set of complex design choices will need to be discussed before moving into any potential pilot phase,” they said.

Bank of America was not immediately available for comment Friday.

Read more: Bank Battle Looms if Treasury Throws Weight Behind Digital Dollar

As PYMNTS has reported recently, the U.S. faces too much competition to not create a digital currency, as China prepares to launch its digital yuan, there’s rising pressure on the EU to make a digital euro and both India and Russia are planning their own central bank digital currencies (CBDCs) in the next two years.

“Our view is that it’s better to be right than first when it comes to CBDC issuance,” Moss and Shah wrote in the report.

“But the digital yuan is already in circulation and a US CBDC issued significantly after a digital euro issuance could potentially pressure the dollar’s status as the world‘s reserve currency.”

See also: ‘National Interest’ Said to Drive US Treasury Support of Digital Dollar

Earlier this month, the U.S. Treasury Department said it plans to advise the federal government to issue a digital dollar, but only if there’s a government signal that it’s “in the national interest.”

The decision is murky, however, thanks to the question of whether U.S. legislators need to pass a law to permit the federal reserve to create a central bank digital currency (CBDC).

An executive order from President Biden in March asked for crypto recommendations from numerous sections of the federal government, and many of them have come due since then. Fed Chair Jerome Powell and other senior officials have said the central bank wouldn’t issue anything official without the blessing of the administration and Congress.