Home Coins Bitcoin (BTC) US Federal Reserve Actively Working on Digital Dollar

US Federal Reserve Actively Working on Digital Dollar


The Federal Reserve Board of Governors and several Federal Reserve Banks are actively working on the digital dollar. Legislation has proposed that each American could have an account at the Fed for transacting in the central bank digital currency.

Several Digital Dollar Initiatives

The president of the Federal Reserve Bank of Cleveland, Loretta J. Mester, outlined the Fed’s work on the country’s central bank digital currency (CBDC) during a speech at the 20th Anniversary Chicago Payments Symposium on Wednesday. Noting that the experience with emergency payments led by the coronavirus pandemic has accelerated the work in this area, Mester detailed:

Legislation has proposed that each American has an account at the Fed in which digital dollars could be deposited, as liabilities of the Federal Reserve Banks, which could be used for emergency payments.

She added that “Other proposals would create a new payments instrument, digital cash, which would be just like the physical currency issued by central banks today, but in a digital form and, potentially, without the anonymity of physical currency.”

Mester explained that some designs of the digital dollar allow the central bank to directly issue the CBDC into end users’ wallets using central-bank-facilitated transfer and redemption services, without the involvement of commercial banks.

She further confirmed that “The Federal Reserve has been researching issues raised by central bank digital currency for some time,” emphasizing that various Federal Reserve Banks are part of initiatives to explore the use of a central bank digital currency.

The Federal Reserve Board of Governors has a technology lab called Techlab that has been building platforms and testing a range of technologies relevant to digital currencies and other payment innovations. Staff members from several Federal Reserve Banks, including software developers, are contributing to this effort.

“Given the dollar’s important role, it is essential that the Federal Reserve remain on the frontier of research and policy development regarding central bank digital currencies,” Federal Reserve Board Governor Lael Brainard previously commented.

As for individual Federal Reserve Banks, Mester highlighted that the Federal Reserve Bank of Boston is collaborating with the Massachusetts Institute of Technology (MIT) to experiment with existing and new technologies that could be used for a digital dollar. This multi-year initiative was launched in August.

The Federal Reserve Bank of New York has established an innovation center in partnership with the Bank for International Settlements (BIS) to identify critical trends and financial technology relevant to central banks.

Mester also stressed the need to evaluate potential risks, costs, benefits, and policy issues surrounding a digital dollar, such as “financial stability, market structure, security, privacy, and monetary policy.” She emphasized that the demand and uses of a CBDC must be assessed to ascertain “whether such a central bank digital currency would allow for quicker and more ubiquitous payments in times of emergency and more generally.”

Meanwhile, a number of central banks worldwide have been accelerating their CBDC research in response to the Libra cryptocurrency project, proposed by social media giant Facebook, and the soon-to-launch China’s digital yuan which is already being tested in several major cities, including Beijing and Hong Kong.

What do you think about having an account at the Fed for digital dollars? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.





Source link

- Advertisement -
Mr Bitcointe
Mr Bitcointehttps://www.bitcointe.com/
“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
474FansLike
76FollowersFollow
4,567FollowersFollow
5,261FollowersFollow
1,553FollowersFollow
2,230SubscribersSubscribe
USD - United States Dollar
EUR
1.19
GBP
1.30
CHF
1.11
NOK
0.11
JPY
0.01
CAD
0.76
AUD
0.71

Most Popular

bitcoin
Bitcoin (BTC) $ 13,285.76
ethereum
Ethereum (ETH) $ 414.89
ripple
XRP (XRP) $ 0.256512
tether
Tether (USDT) $ 1.00
bitcoin-cash
Bitcoin Cash (BCH) $ 274.78
bitcoin-cash-sv
Bitcoin SV (BSV) $ 173.82
litecoin
Litecoin (LTC) $ 58.41
eos
EOS (EOS) $ 2.66
binancecoin
Binance Coin (BNB) $ 30.73
okb
OKB (OKB) $ 4.56
tezos
Tezos (XTZ) $ 2.23
leo-token
LEO Token (LEO) $ 1.24
cardano
Cardano (ADA) $ 0.108181
monero
Monero (XMR) $ 129.47
stellar
Stellar (XLM) $ 0.085485
chainlink
Chainlink (LINK) $ 12.78
huobi-token
Huobi Token (HT) $ 4.49
tron
TRON (TRX) $ 0.027140
usd-coin
USD Coin (USDC) $ 0.998732
dash
Dash (DASH) $ 73.29
neo
NEO (NEO) $ 18.36
iota
IOTA (MIOTA) $ 0.289172
nem
NEM (XEM) $ 0.105518
zcash
Zcash (ZEC) $ 64.51
maker
Maker (MKR) $ 599.22
paxos-standard
Paxos Standard (PAX) $ 0.997360
ethereum-classic
Ethereum Classic (ETC) $ 5.53
vechain
VeChain (VET) $ 0.012429
true-usd
TrueUSD (TUSD) $ 0.999074
ftx-token
FTX Token (FTT) $ 3.96
kucoin-shares
KuCoin Shares (KCS) $ 0.901900
waves
Waves (WAVES) $ 3.45