The Fed is studying the digital dollar
The Fed is studying the digital dollar
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The Fed is studying the digital dollar

By Marco Cavicchioli - 6 Feb 2020

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Lael Brainard, a member of the Board of Governors of the Federal Reserve, said the Fed is studying the feasibility of a digital dollar

The news was made public by Bloomberg, although it had been in the air ever since former CFTC Chairman Christopher Giancarlo had explicitly suggested that the Fed was already working on something similar to the Chinese project for a Central Bank Digital Currency (CBDC). 

During a speech at the Stanford Graduate School of Business in California, Brainard said: 

“Given the dollar’s important role, it is essential that we remain on the frontier of research and policy development regarding central bank digital currency. We are conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC”.

By stating this, Brainard fully confirmed Giancarlo’s rumours, reiterating that not only has a research phase in this direction begun but that even testing is already underway

He also pointed out some of the problems that need to be addressed before deciding to issue a CBDC in the US: which banks or financial institutions could offer digital currency accounts and who should supervise them, what kind of risks to financial stability could be posed by CBDCs, but also what benefits the issuance of a digital currency could bring, for example in terms of reducing costs and operational vulnerabilities.  

What is certain is that it was Facebook’s Libra project that started this in-depth study

In fact, Brainard added: 

“Because Facebook has an active user network of one-third of the global population, the company’s Libra global stablecoin project has imparted urgency to the debate over what form money can take, who or what can issue it, and how payments can be recorded and settled”.

Furthermore, it appears that the Chinese central bank is getting serious about this, so the Fed cannot afford the luxury of standing on the sidelines

However, there is still absolutely no guarantee that the digital dollar will ever really come to life. 

 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 11 thousand subscribers.

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