Federal Reserve publishes long-awaited central bank digital currency report
The US Fed's long-awaited report on central bank digital currencies dropped Thursday afternoon.
Framed as a discussion paper, the Fed notes in its introduction release that it "examines the pros and cons of a potential U.S. central bank digital currency, or CBDC."
"It invites comment from the public and is the first step in a discussion of whether and how a CBDC could improve the safe and effective domestic payments system. The paper does not favor any policy outcome," the paper continues.
The paper, long-awaited by policy-watchers and members of Congress, represents a significant foray into the Fed's work in the realm of CBDC. However, the Fed has said that any movement toward an actual digital dollar lies squarely in Congress' court.
Here's more from the Fed release:
"Consumers and businesses have long held and transferred money in digital forms, via bank accounts, online transactions, or payment apps. The forms of money used in those transactions are liabilities of private entities, such as commercial banks. Conversely, a CBDC would be a liability of a central bank, like the Federal Reserve. While a CBDC could provide a safe, digital payment option for households and businesses as the payments system continues to evolve, and may result in faster payment options between countries, there may also be downsides. They include how to ensure a CBDC would preserve monetary and financial stability as well as complement existing means of payment. Other key policy considerations include how to preserve the privacy of citizens and maintain the ability to combat illicit finance. The paper discusses these and other factors in more detail."
To wit, the Fed has released a series of questions alongside the paper in the hopes that the public will respond in the next 120 days.
"We look forward to engaging with the public, elected representatives, and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency in the United States," Jerome Powell, Fed chairman, said in a statement along with the paper's release.
The full paper can be found here.
This is a breaking story and will be updated with more details.
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