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- Other nations are rushing to create their own central bank digital currency (CBDC), according to Federal Reserve Governor Lael Brainard, who spoke to Reuters on Friday
- The Fed governor was cited by Reuters as stating that a digital currency might enable individuals without bank accounts to obtain government aid such as pandemic relief payments
- The Boston Fed and MIT have collaborated on a project to create a hypothetical model, while many other Fed districts are conducting their own studies
Other nations are rushing to create their own central bank digital currency (CBDC), according to Federal Reserve Governor Lael Brainard.
According to a Reuters report, Brainard said at the Aspen Institute Economic Strategy Group, The dollar is very dominant in international payments, and if the other major jurisdictions in the world have a digital currency, a CBDC offering, and the US doesn’t have one, she can’t wrap my head around that.
Governor Lael Brainard of the Federal Reserve pushed for a digital dollar, saying on Monday that a cryptocurrency backed by the central bank might have a number of advantages.
One of the benefits Brainard mentioned in a speech at a conference is the ability to provide financial services to almost 1 in 5 Americans who are deemed underbanked.
She also mentioned the security of a Fed-backed system, as well as efficiency gains and cross-border payments (transactions between persons in different nations). According to the paper, Brainard believes that the development of stablecoins might split the payment system in the absence of a digital currency.
The Fed governor was cited by Reuters as stating that a digital currency might enable individuals without bank accounts to obtain government aid such as pandemic relief payments. In a separate statement, Brainard stated that she sees no evidence that current high inflation readings are driving longer-term inflation expectations over the central bank’s 2% objective.
She stated the Federal Reserve is dedicated to ensuring that the public has access to safe, dependable, and secure forms of payment, including cash. As part of this commitment, they must investigate — and attempt to predict — the extent to which household and company requirements and preferences may move further to digital payments over time. Those remarks come just days after Federal Reserve Chairman Jerome Powell said that the central bank will release a working paper on central bank digital currencies this summer. The Boston Fed and MIT have collaborated on a project to create a hypothetical model, while many other Fed districts are conducting their own studies. Essentially, the creation of the CBDC would provide consumers with more access to electronic currency, such as bitcoin and its ilk. China’s central bank, like many others across the world, has been pressing forward with its own initiative. The epidemic, according to Brainard, demonstrated the importance of creating a Fed-backed currency. When Congress first started distributing relief payments, some people didn’t get them for weeks because they didn’t have accounts or their information with the IRS wasn’t up to current. A CBDC would help get money more quickly to those people, she said.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
