I can not understand that I do not have the digital currency of the American central bank



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By Ann Saphir

(Reuters) – Federal Reserve Governor Lael Brainard on Friday laid out a series of “urgency” reasons surrounding the issue of developing a digital currency for the US central bank, including the fact that other countries like China are moving forward with theirs.

“The dollar is very dominant in international payments, and if you have the other major jurisdictions in the world with a digital currency, a CBDC (central bank digital currency) offering, and the United States doesn’t, I can just, I can. I don’t understand that, “Brainard told the Aspen Institute’s economic strategy group.” It just doesn’t sound like a sustainable future to me. “

Fed officials are delving into the world of digital payments, gathering public comment on potential costs and benefits as well as design considerations with a view to issuing a discussion paper in early September.

Fed Chairman Jerome Powell in comments earlier this month described the analysis as a key step in accelerating the Fed’s efforts to determine whether it should issue its own CDBC.

“One of the most compelling use cases is in the international arena, where the chains of intermediation are opaque, long and expensive,” Brainard said on Friday.

But there are also national reasons for a US-backed digital currency, she said: the dramatic rise in stablecoins, a form of cryptocurrency tied to a conventional currency such as the US dollar but not supported by a government.

Stable coins could proliferate and fragment the payments system, or one or two could become dominant, she said. Anyway, “in a world of stablecoins, you can imagine that households and businesses, if the out-of-the-money migration is really very intense, they would simply lose access to a backed secure settlement asset. by government, which of course is what money has always provided. “

A CBDC could help solve other issues as well, she suggested, including the difficulty during the pandemic of getting government payments to people without bank accounts, who also tend to be the very ones who have. most needed payments.

(Reporting by Ann Saphir; Editing by Sandra Maler)

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