INDUSTRY U P DAT E S
FEDER AL RESERVE TO EXPLORE
Benefits and Risks of
A C E NTR A L B A N K D I G ITA L C U R R E N CY by Carl White
R
ecently, the Federal Reserve System released a discussion paper titled, Money and Payments: The US Dollar in the Age of Digital Transformation. The paper does not make an argument for or
against a Central Bank Digital Currency, or CBDC; rather, it offers some of the Federal Reserve’s views on how a CBDC might be designed and outlines several factors that the Federal Reserve will weigh before making any decision on a U.S. CBDC.
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The Federal Reserve has long believed it can achieve better policy outcomes when it engages a wide range of stakeholders in deliberating different policy choices. The choice of whether to launch a CBDC is no different, and the discussion paper poses 22 questions to the public on the potential benefits and risks of a CBDC. Responses are requested by May 20, 2022, and may be submitted at the following link: https://www.federalreserve.gov/apps/forms/cbdc. The questions for which the Federal Reserve is seeking public comment are:
