The Federal Reserve has released a report outlining the potential advantages and disadvantages of issuing a digital dollar.
The Federal Reserve released a report, which had been expected since last summer. In it, the regulator described the pros and cons of a central bank digital currency.
Fed staff have been studying CBDCs for “several years,” but creating a digital currency backed by the Federal Reserve will be difficult. The paper notes:
Designing appropriate security for a CBDC can be particularly challenging because a CBDC network could potentially have more entry points than existing payment services.
But for all the technological challenges, the document notes:
CBDC will be the safest digital asset available to the general public, with no associated credit or liquidity risk. While securing a CBDC would be challenging, a digital dollar could improve the operational strength of the payment system if it were designed to operate offline (that is, if it allowed some payments to be made without access to the Internet).
Essentially, the Fed has spoken neither for nor against the issuance of a CBDC. The agency is seeking public comment on more than 20 questions on this topic. People will have until May 20 this year to participate in this phase of the research. Moreover, the report makes it clear that the Fed will not promote CBDC unless it receives clear support from the executive branch as well as Congress.
Subscribe to ForkNews on Telegram to stay up to date with news from the world of cryptocurrencies
You May Also Like
The IMF demands that the Marshall Islands abandon cryptocurrency
Representatives of the International Monetary Fund (IMF) have officially stated that the government of the Marshall Islands should “seriously reconsider” its idea of adopting digital currency as a second legal tender. At the moment, the only means of payment in the country is the US dollar.
Huobi creates a new committee to work with the Chinese Communist Party
The Huobi Group has established a Communist Party cell in one of its subsidiaries in Beijing. The group that owns the Huobi exchange announced on its website on November 16 that it is “necessary to implement” the principles and policies of the Communist Party into private companies. The move, which is a first of its kind for the Chinese cryptocurrency space, is also aimed at gaining party support for the platform's business in the country.
