Federal Reserve governor Lael Brainard has called for a move towards the creation of a US central bank digital currency (CBDC).
The growing appetite for a CBDC in the US comes as multiple nations are already piloting their concepts for such financial mechanisms.
Speaking at the Aspen Institute Economic Strategy Group, Brainard expressed concern that US dollar hegemony may be disrupted if target markets switch to digital currencies, but the US dollar doesn’t keep up.
His position reflects a larger momentum at the Federal Reserve, which is carrying out research on CBDCs to be presented in September.
Federal Reserve chair Jerome Powell confirmed that a report is forthcoming at a House Committee earlier this year.
Brainard shared a broader concern in financial circles, which is that stablecoins threaten to fragment the global payment system in the absence of a digital dollar to underpin it all. To some, apparently, the lack of a digital US dollar is tantamount to allowing a financial 9/11.
Brainard also argued that the digital dollar could help people without bank accounts to get immediate government funds when a natural disaster or pandemic strikes.
The push for CBDCs has been tangible around the world. China is already forging ahead with its own version, the digital yuan, which is arguably the world’s most accomplished CBDC to date. At the same time, Bank of America already confirmed that CBDC is money.
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