The Federal Reserve is more interesting in the idea of central bank digital currency than before, said Lael Brainard, board member at the US central bank.
“The Fed was conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC (central bank digital currency).”
Brainard referred to the Bank for International Settlements’ (BIS) survey, which indicated that 80% of central banks around the world have been studying the CBDC project since the beginning of 2020. This figure is 10% higher than the one recorded last year.
The official said the central bank should continue its research regarding the development of CBDC. She cited the significant role played by the US dollar in international markets,
Brainard also said:
“For smaller economies, there may be material effects on monetary policy from private-sector digital currencies as well as foreign central bank digital currencies. In many respects, these effects may be the digital version of ‘dollarization,’ with the potential for a faster pace and wider scope of adoption.”
However, the official earlier said in a San Francisco conference that there is no urgent need for the Federal Reserve to issue a digital currency.
Six Central Banks to Explore CBDC In April
Cryptolydian reported today that governors of six major central banks will meet in April in Washington to discuss a research on digital currencies.
However, Takako Masai, a board member at Bank of Japan, said no timetable has been fixed for the meeting, but the central banks should respond to rapid growth of digitalization.
Masai also said:
“In Japan, we don’t have any plans now to issue central bank digital currencies (CBDC). But we need to make an effort so we’re ready to respond, in case public demand for central bank digital currencies rises dramatically.”
Christine Lagarde, President of the European Central Bank (ECB), earlier said the bank plans to actively develop its CBDC to facilitate cheaper and quicker payments for individuals and corporates.