Fed's Brainard believes there is a case for U.S. central banks digital currency

Federal Reserve Board Governor Lael brainard presented a case Friday for the role that a U.S. central banking digital currency can play in bolstering financial security as stablecoins and crypto grow and other countries issue CBDCs.

Fed's Brainard believes there is a case for U.S. central banks digital currency

Brainard stated that it was crucial that policymakers, including Federal Reserve officials, plan for the future payment system and consider all possible options to bring forth the potential benefits from new technologies while maintaining stability. Brainard made these remarks in remarks he prepared to deliver to the U.S Monetary Policy Forum. A U.S. CBDC could be one way to ensure that all people who use the dollar around the globe can continue to trust the U.S. currency's strength and safety to transact in and do business in the digital financial market.

While Fed policymakers disagree on the necessity of a central bank digital cryptocurrency, many central banks around the world are pushing ahead with such plans.

Brainard is a strong supporter of this idea. However, she stressed the importance of considering the impact of a U.S. CBDC and not making outright claims about the necessity to adopt it.

She said that it was important to think about how digital money and crypto-assets could affect the Federal Reserve’s responsibilities to keep financial stability, a safe, efficient payment system, household access to central bank money and maximum employment, as well as price stability and price stability.

While some CBDC supporters claim it can streamline payment systems, increase financial inclusion, and even boost financial stability, others are concerned about the cost, privacy, and security concerns.

Fed policymakers appear to agree on one point: The Fed won't launch one without the White House's and Congress' clear support, policymakers indicated.


 

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