During a hearing on the potential introduction of a digital dollar, Senator Tom Cotton claimed whatever the United States comes up with, it has to “be better than Bitcoin.”
He also asserts it must be better than China’s digital yuan, which is currently in its pilot phase in the country. If it doesn’t, the dollar’s place in the “global payments system” may be at risk.
The United States Debates The Introduction of A Digital Dollar
Late last month, the United States Senate Banking Committee held a virtual hearing debating the need for a digital dollar.
The dollar has long reigned as the global reserve currency, affording the United States an untouchable superpower position through its currency.
Nearly every major market is bound to USD as the base currency. It’s used as the primary exchange rate for all other currencies, including Bitcoin.
Related Reading | Economist Warns of Warp Speed Dollar Decline, How Will Bitcoin Respond?
For the first time throughout its history of dominance, the dollar is showing signs of weakness following the pandemic.
The dollar has remained relatively unchallenged by Bitcoin despite its powerful potential. The fact that it’s unregulated, uncontrollable, and currently clunky and confusing, it poses little threat to the dollar in its current state.
However, a major threat to the dollar’s supremacy exists in China’s launch of the Digital Currency Electronic Payment system.
Global Reserve Currency Status At Risk Due to Bitcoin and Digital Yuan
During the hearing, former CFTC Chairman and Crypto Dad J. Christopher Giancarlo urged the US to “adapt,” citing “social and national benefits” along with referencing Darwinism.
Beating the US to the punch, however, has been China. The country is close to launching its own version of the digital yuan that, left untested by a digital version of USD, could lead to the DCEP coming into power.
Also at the hearing, Senator Tom Cotton warned that anything the US creates must be better than Bitcoin and the digital yuan.
But because Bitcoin is a decentralized cryptocurrency under no government’s control, the dollar is more closely competing with the digital yuan.
China’s digital currency could potentially unseat the dollar as the global reserve.
If this happens, and China successfully rolls out a digital currency long before the US gets its act together, the dollar’s days as the king could be numbered.
If the dollar fails to retain its place in the global payments system as the Senator warns, Bitcoin or the DCEP could be next in line.
Bitcoin as a non-sovereign asset gives it additional value beyond the digital yuan or dollar could ever have, and that’s due to its decentralized design.
Unlike these new digital assets that like paper fiat money can be printed at a whim, Bitcoin is different. Only 21 million BTC will ever exist and nothing can change that.
It also could be this very reason why any attempt from the US to be “better than Bitcoin” will come up short.