The Federal Reserve, the central bank of the United States, has released a long awaited report and assessment on digital currency. The report, originally slated for released last year, was released yesterday. The 40-page PDF can be found here and the public is encouraged to read it and provide any feedback or comments to the Federal Reserve.
The report itself is neutral in that the Fed does not take a particular stance on digital currency. Instead, it lays out in great detail the benefits, challenges, and different types of digital-based currency. As far as the Fed is concerned, this report and its primary concern is Central Bank Digital Currencies, or CBDC’s.
For a nation’s economy to function effectively, its citizens must have confidence in its money and
payment services. The Federal Reserve, as the nation’s central bank, works to maintain the public’s confidence by fostering monetary stability, financial stability, and a safe and efficient payment system.
Federal Reserve Digital Currency Report
This paper is the first step in a public discussion between the Federal Reserve and stakeholders
about central bank digital currencies (CBDCs). For the purpose of this paper, a CBDC is defined as
a digital liability of a central bank that is widely available to the general public. In this respect, it is
analogous to a digital form of paper money. The paper has been designed to foster a broad and
transparent public dialogue about CBDCs in general, and about the potential benefits and risks of
a U.S. CBDC. The paper is not intended to advance any specific policy outcome, nor is it intended
to signal that the Federal Reserve will make any imminent decisions about the appropriateness of
issuing a U.S. CBDC.
The report is a fairly technical read but for those who are curious about how the Fed is thinking about digital currency, it is worth the effort and time.