The United States Federal Reserve is starting to be optimistic about the idea of a Central Bank Digital Currency (CBDC).
This was stated by Lael Brainard, the Chair of the Committees on Financial Stability, Federal Reserve Bank Affairs.
On the 5th of February, she explained that the top decision-makers of the US Federal Reserve have begun to examine the idea positively.
In her speech, she said that the reserve was conducting researches and experiments as regards distributed ledger technologies and their feasibility for digital currencies.
This contained the capability for CBDC.
Recall that the Federal Reserve had a few months ago announced that they had not detected a pressing need for a Federal-issued digital currency.
Lael Brainard had said this at a Digital Currency Conference, focused on the future of payments which was held at the Stanford Graduate School of Business, San Francisco.
Now, this discussion has changed.
Digital Currency conversation getting serious with the US Federal Reserve
Within the US Federal Reserve, this talk is seeming more serious.
Lael Brainard illustrates numerous recent surveys generated by the Bank for International Settlements, and this shows that as of January 2020, 80 percent of central banks globally are now involved in some form of CBDC work, and that is 10 percent higher than 2019.
She affirmed that with the popularity of the dollar and its crucial role in the global markets, there is a standard, and the US could not afford to not be on the horizon of research and policy development, especially with regards to CBDC.
She reiterated the CBDCs potential to play a crucial role in retaining a sovereign currency as the basis of a nation’s payment system.
US Federal Reserve commences settlements service ‘FedNow’
Taking the Chinese digital yuan and the Facebook Libra Project as illustrations, Brainard noted that new digital payments, currency, and settlement instruments are now on the increase in both private and public sectors, globally.
In turn, these have urged the US Federal Reserve to improve work on its expected 24/7 payments and settlements service, “FedNow.”
It would be a real-time service, and while not being a full-fledged CBDC, it would enable individuals and businesses effectively manage their funds and make time-sensitive transactions at any period.