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A report by Bison Trails reveals that 80% of Central Banks are exploring CBDC use.
The United States Federal Reserve (Fed) has announced that it plans to issue a paper discussing the potential issuance of a digital dollar. The paper is set to be released this summer. In a statement posted on the Federal Reserve website on Thursday, Federal Reserve Board Chair Jerome H. Powell revealed that the Federal Reserve was studying advancements made in technology and payments systems to better deliver on its charge as the core payment services provider and issuer authority of the US dollar.
“As the central bank of the United States, the Federal Reserve is charged with promoting monetary and financial stability and the safety and efficiency of the payment system,” Federal Reserve Board Chair Jerome H. Powell said Thursday in a video message. “In pursuit of these core functions, we have been carefully monitoring and adapting to the technological innovations now transforming the world of payments, finance, and banking.
The US joins other governments in exploring the possibility of digital currencies. China and some European countries are working to roll out Central Bank Digital Currencies (CBDCs) in a bid to improve payment systems and to ward off the perceived “threats” of cryptocurrencies.
The Federal Reserve has taken a more cautious route. It was revealed earlier this month that the Reserve was partnering with the Massachusetts Institute of Technology (MIT) to develop a platform for a hypothetical virtual dollar. Powell emphasized that the Reserve was in no hurry to roll out the digital dollar as they wanted to get it right. Another priority of the Reserve, according to the statement released on Thursday, is to make sure that the virtual Dollar works seamlessly with current payment systems.
“We think it is important that any potential CBDC could serve as a complement to, and not a replacement of, cash and current private-sector digital forms of the dollar, such as deposits at commercial banks,” Powell said. The design of a CBDC would raise important monetary policy, financial stability, consumer protection, legal, and privacy considerations and will require careful thought and analysis – including input from the public and elected officials.”
Meanwhile, according to CoinDesk, a report by Bison Trails reveals that 80% of Central Banks are exploring CBDC use. At present, proof-of-concept programmes have be launched in at least 11 regions including Hong Kong, Thailand, China, Australia, Singapore and Japan.