Sep 24, 2020 16:20 UTC
Sep 24, 2020 at 16:20 UTC
The CEO and President of the Federal Reserve Bank of Cleveland have exposed facts of the Fed’s ongoing research into a possible digital dollar.
On September 23, Speaking in a keynote address, Loretta Mester highlighted that the Federal Reserve has been discovering central bank digital currencies subsequently before the pandemic, noticing that its Board of Governors has been ‘building and testing a range of distributed ledger platforms to understand their potential benefits and trade-offs’.
This woman also noted creativities from regional Federal Reserve branches, with a multi-year partnership between the Massachusetts Institute of Technology and the Boston Fed, in adding to the association between the Bank for International Settlements and the Fed’s New York Branch.
Notwithstanding the continuing research, Mester declared that the creativities do not ‘signal any decision by the Federal Reserve to adopt such a currency,’ addition that subjects connected to ‘financial stability, security, market structure, privacy, and monetary policy all necessary to be better understood’.
Mester noted that the COVID pandemic has caused in important disturbances to ‘crucial infrastructure”’of the U.S., like the payments sector, and had caused in foremost changes to the designs and capacity of domestic transfers.
‘The spread of COVID-19 sharp the reliance of businesses and individuals on digital services and faster connectivity, as many employees initiated to work from home and consumers turned to online shopping’.
Observing fast, Mester highlighted the importance of “making necessary investments to safeguard that the U.S. payments system remains resilient in the face of extreme stress events will need to remain a priority.”
The Central Bank of The Bahamas declared the archipelago nation was aiming to become the first country to launch a CBDC, Mester’s speech comes two weeks after that revealing that it’s ‘Sand Dollars’ digital currency will be launched nationwide in October.
Many analysts are critical of the prospects of success for CBDC initiatives, however, with economist John Vas describing state-backed virtual currencies as “a defensive posture” against the threats posed by decentralized crypto assets to governments’ long-standing hegemony over monetary policy. The Federal Reserve Bank has been travelling digital currencies to update the U.S. payments sector.