HomeBusinessFed's Brainard sees case for US central bank digital currency

Fed’s Brainard sees case for US central bank digital currency

Federal Reserve Board Governor Lael Brainard on Friday laid out a case for the position a U.S. central bank digital currency might play in bolstering monetary stability as using stablecoins and cryptocurrency grows and different nations subject their very own CBDCs.

“It is essential that policymakers, including the Federal Reserve, plan for the future of the payment system and consider the full range of possible options to bring forward the potential benefits of new technologies, while safeguarding stability,” Brainard stated in remarks ready for supply to the U.S Monetary Policy Forum in New York. “A U.S. CBDC may be one potential way to ensure that people around the world who use the dollar can continue to rely on the strength and safety of U.S. currency to transact and conduct business in the digital financial system.”

Fed policymakers are divided on the necessity for a central bank digital currency, at the same time as many different central banks globally are urgent forward on such plans.

Brainard has emerged as a supporter of the concept, although in her remarks she emphasised the significance of contemplating the potential influence of a U.S. CBDC moderately than making any outright claims for the necessity to undertake it.

“It is important to consider how new forms of crypto-assets and digital money may affect the Federal Reserve’s responsibilities to maintain financial stability, a safe and efficient payment system, household and business access to safe central bank money, and maximum employment and price stability,” she stated Friday.

Proponents of a CBDC say it might streamline fee techniques, enhance monetary inclusion and even bolster monetary stability, whereas others fear in regards to the prices, together with privateness issues.

On one level Fed policymakers do look like in settlement: the Fed is not going to launch one with out clear help from the White House and Congress, policymakers have indicated.

(Reporting by Ann Saphir; Editing by Andrea Ricci)

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