What would be the impact of a US digital dollar?

US President Joe Biden has ordered the federal government to look into creating a digital dollar, a move with the potential to reshape how money is moved and used around the world.

Before his order results in a virtual greenback, there will be numerous major impacts -- and risks -- to consider first.

Here are some key questions:

It would still be a dollar issued by the US Federal Reserve central bank, like all US bills and coins used now, but in a digital form that is accessible to everyone, not just financial institutions.

Unlike money deposited in a bank account or spent via apps like Venmo and Apple Pay, it would be registered in the accounts of the Federal Reserve, not a bank.

At the same time, the digital dollar would be worth the same as its paper counterpart, a divergence from cryptocurrencies which currently have highly volatile valuations.

Key questions remain unanswered, like whether a digital dollar would be based on blockchain technology like bitcoin or if it would be linked with some sort of payment card. Biden is asking agencies, including the Treasury Department, to examine various issues on the topic.

If the government decides to go ahead, it could take "a number of years" before we can use a digital dollar -- authorities will have to explore for instance which technology to use, said Darrell Duffie, a digital currencies expert at Stanford University in California.

It would reduce or even eliminate transaction fees since exchanges would no longer go through banks, bank cards or apps that take commissions on every payment.

Proponents say it would help people without bank accounts, about five percent of households in the United States, and could make it easier for the government to pay benefits. There are risks like a system failure or a cyberattack, and there are also questions about privacy, as the government could theoretically have access to all transactions.

The banking system could also be undermined as banks currently use customers' deposits to lend to others, and with a digital dollar they could have less money at their disposal.

International transfers, often slow and expensive to make, could be greatly eased.

An operation that currently takes two days to be validated could be done in one hour, said Marc Chandler, a foreign exchange expert for the broker Bannockburn.

For Chandler, the geopolitical role of the US dollar would not be upset by the digital version's introduction.

A digital dollar would represent "a natural evolution rather than a revolution", he noted, recalling that more than $6.5 trillion are already exchanged in electronic form every day on the foreign exchange market.

Even if China launches a large-scale digital yuan, as is being discussed, he said he doesn't think that changes China's role in the world economy as "there will always be questions of trust, transparency, depth of markets."