The U.S. Federal Reserve has published its biggest statements yet on a Central Bank Digital Currency (CBDC) for the U.S. Dollar, in the form of a report published on Jan. 20. Titled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation,” the paper discusses the potential benefits and risks of CBDCs in the U.S. economy and seeks to generate dialogue on the matter.
The U.S. Federal Reserve report does not recommend any specific policy.
U.S. officials have not taken strong stances overall, and the paper does not recommend specific policy, preferring to foster dialogue with inputs from stakeholders and the general public. Among the primary concerns are cybersecurity, consumer privacy rights, and the prevention of financial crimes. The report has been coming a long time, with many experts and analysts wondering when the U.S. might begin a more thorough review of a CBDC. With countries like China already having launched multiple pilots, these analysts have been wondering how much longer other major economies would be lagging.
Digital dollar CBDC seems likely.
The U.S. has been noted as being very cautious when it comes to a CBDC, even as other major economies pick up the pace. The Asian country is looking to get things right as opposed to being the first one and does not want to risk any mistakes. As reported earlier, China has launched multiple pilots with volumes of its digital renminbi reaching nearly 90 billion, and the asset will be used in the upcoming 2022 Winter Olympics in Beijing. Some countries are a little further along than the U.S. Nigeria, Sweden, France, Canada, Australia, and India are among the many that are reviewing the implementation of a CBDC.