By Andrea Shalal and Katanga Johnson

WASHINGTON, (Reuters) – The U.S. president Joe Biden signed an executive order Wednesday directing the government to evaluate the benefits and risks of creating a digital currency central bank.

Biden’s orders will force the Commerce Department, Treasury Department and other agencies to produce reports about “the future money” as well as the potential role of cryptocurrencies.

Officials stated that a broad oversight of cryptocurrency markets, which surpassed $3 trillion in November 2017, is crucial to protect U.S. financial stability, national security and U.S. competability, as well as ward off cybercrime.

Analysts consider the long-awaited executive orders, which was first reported Monday, as a clear acknowledgement of the increasing importance of cryptocurrencies and the potential effects on the U.S., global and international financial systems.

The U.S. Government is required to examine the technical infrastructure necessary for a U.S. Central Bank Digital Currency. This electronic currency can be used as a digital version of your dollar bills.

U.S. Federal Reserve opened January’s debate on whether the United States should issue a digital dollars to Congress. This led analysts to forecast that it would be a long-term project.

One official stated that the United States will continue to develop a digital currency, but with caution given its role as the primary reserve currency in the world.

Official said, “We need to be extremely careful in that analysis as the consequences of us moving in that direction are profoundly for the country which issues the primary reserve currency worldwide.”

It also urges the Federal Reserve not to stop research or development.

Nine countries have launched central bank digital currencies, and 16 others – including China – have begun development of such digital assets, according to the Atlantic Council https://www.atlanticcouncil.org/cbdctracker, leading some in Washington to worry that the dollar could lose some of its dominance to China.

Official said that the U.S. dollar is still supported by fundamentals such as transparency, rule of law, and full independence of Federal Reserve.

The dollar is crucial for the stability and viability of the global monetary system. The dominance of the dollar isn’t threatened by digital currencies from other central banks and their subsequent introduction.

According to the official, USA will continue to monitor the developments in order not lose the importance of dollar in global economics.

Additionally, agencies such as the Securities and Exchange Commission and Consumer Financial Protection Bureau are asked to look into other issues related to cryptocurrencies. This includes systemic risk and consumer safety.

One official explained that the main objective of this initiative is to correct inefficiencies in U.S. payment system and increase financial inclusion. This includes poor Americans who, at 5%, do not have bank accounts due high fees.

According to another official, “Before today there hadn’t been an organised effort to gather the expertise of all U.S. governments to inform holistic approaches to digital assets.”