For a while now, we’ve been hearing about the general utility and appeal of central bank digital currencies or CBDCs.
However, the U.S. Federal Reserve, the private central bank responsible for managing the dollar, has been pretty reluctant to sign off on actual research and development of a digital dollar.
Today’s headlines show that’s getting an incremental adjustment in the form of remarks from Fed Board Governor Lael Brainard, who made some ground-breaking comments on U.S. CBDC development according to reporting by Nikhilesh De at Coindesk.
“With these important issues in mind, the Federal Reserve is active in conducting research and experimentation related to distributed ledger technologies and the potential use cases for digital currencies,” Brainard reportedly said while speaking at the Federal Reserve Bank of San Francisco.
Specifically, Brainard’s testimony shows that the Federal Reserve is looking at blockchain types of systems as tools for keeping America competitive in the future.
“Brainard explained the objectives of the research is to understand safety and efficiency of digital currency systems, including ‘private-sector arrangements’, and provide hands-on experience to understand the technologies available for central bank money,” adds MoonX at Medium, on the public comments.
Brainard mentions China as an early adopter, and the imperative to keep pace with a superpower that has particular economic and political clout globally. She also also addresses the coronavirus pandemic as a prime mover of increased and expedited digital dollar activity.
“The COVID-19 crisis is a dramatic reminder of the importance of a resilient and trusted payments infrastructure that is accessible to all Americans,” Brainard said. “It was notable that after a sharp reduction in spending early in the COVID-19 crisis, many households increased their spending starting on the day they received emergency relief payments.”
De’s reporting further reveals that the Boston office of the Federal Reserve is working with none other than MIT to explore opportunities for this kind of digital standard.
This is big news to crypto fans, so keep it in mind as you plan your emerging portfolio.