No decision on digital dollar in Fed’s new CBDC report

The U.S. Federal Reserve’s report on central bank digital currencies (CBDCs) released on Thursday did not contain policy recommendations or decisions on digital dollar issuance.

Fast facts

• The paper acknowledged that the Fed will not proceed in creating a digital dollar without clear support from lawmakers, ideally through a specific authorizing law.

• The Fed said that its 40-page report is the “first step in a broad consultation” and made a request for public comments.

• CBDCs are cryptocurrencies issued by central banks and the U.S. is lagging behind other countries in developments, including China whose e-CNY is set to take the stage at the upcoming Winter Olympics.

• The Fed said that a CBDC would increase payment speed and options for Americans but also posed a risk to financial stability and personal privacy.

• Nine countries have fully launched CBDCs, most recently the e-Naira in Nigeria.