China beats the US when it comes to online money innovation, which calls into question the status of the US dollar as a de facto currency reserve. Almost 80 countries – including China and the US – are in the process of developing a CBDC, or central bank digital currency. It is a form of money that is regulated but exists entirely online. China has already rolled out its digital yuan to more than a million Chinese, while the US is still largely focused on research.

The two groups in the United States commissioned with this research, MIT’s Digital Currency Initiative and the Federal Reserve Bank of Boston, are analyzing what a digital currency could look like for Americans. Privacy is a major concern, so researchers and analysts are watching China’s digital adoption of the yuan.

“I think if there is a digital dollar, privacy will be a very, very important part of it,” said Neha Narula, director of the Digital Currency Initiative at MIT Media Lab. “The United States is very different from China.”

Another concern is access. According to the Pew Research Center, 7% of Americans say they don’t use the Internet. For black Americans that is 9% and for Americans over 65, 25%. Americans with a disability are about three times more likely than people without disabilities to say they never get online. That’s part of what MIT is researching.

“Most of the work we do assumes that CBDC will coexist with physical cash and that users can continue to use physical cash if they want,” said Narula.

The idea of ​​a CBDC in the US aims in part to ensure that the dollar remains the currency leader in the world economy.

“The United States should not rest on its current leadership role in this area. You should move forward and develop a clear strategy to stay very strong and capitalize on the strength of the dollar, ”said Darrell Duffie, professor of finance at the university’s Stanford Graduate School of Business.

Others consider the digital yuan to be insidious.

“The digital yuan is the greatest threat to the West that we have faced in the past 30 or 40 years. It enables China to invade everyone in the West and export its digital authoritarianism, ”said Kyle Bass of Hayman Capital Management.

Check out CNBC’s deep dive video to CDBCs to learn more.