The Federal Reserve has released the report on the feasibility of issuing a central bank digital currency (CBDC) in the United States, the report has been publicly anticipated for some time.
The Fed said the report will be shared with the general public and key stakeholders. CBDC He explained that this would serve as a first step in discussing the pros and cons of establishing
Regulatory agency’s report, pegged to fiat stablecoinHe noted that some of the disadvantages associated with ‘s may have the potential to disrupt the payment system, intensify economic power and make destabilizing increases.
Based on this thought, FedHe also stated that he was brainstorming the possibility of creating a CBDC for the US economy.
“Like current forms of commercial bank money and non-bank money, a CBDC will enable the general public to make digital payments. However, as an obligation of the Federal Reserve, a CBDC does not need mechanisms such as deposit insurance to maintain public confidence, and a CBDC does not need to be backed by an underlying pool of assets to maintain its value. A CBDC will be the safest digital asset available to the public, without any credit or liquidity risk.”
The report emphasized that any CBDC should be subject to rules that also apply to financial institutions to prevent money laundering and financing of illegal activities.
Other benefits of CBDC included improving the efficiency of cross-border payments, supporting the international role of the US dollar, and providing financial inclusion for those facing economic barriers.
The report concluded that:
“A CBDC can potentially act as a new foundation for the payment system and a bridge between different payment services, both old and new. It can also maintain the centrality of safe and reliable central bank money in a rapidly digitizing economy.”