Fed's Brainard Says US Can't Not Have a CBDC in a World in Which Others Have Them

Brainard said without a digital dollar the proliferation of stablecoins could fragment the payment system.

By Kevin Reynolds

Jul 31, 2021 at 10:38 p.m. UTC

Updated Sep 14, 2021 at 1:33 p.m. UTC

Lael Brainard, governor of the U.S. Federal Reserve

Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Secure Your Seat

Kevin Reynolds

Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Secure Your Seat

Chief among the reasons the U.S. needs to have a digital dollar is that other countries are racing to issue their own central bank digital currencies (CBDC), Federal Reserve Governor Lael Brainard said on Friday, Reuters reported.

Speaking at the Aspen Institute Economic Strategy Group, Brainard said, "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 offering, and the U.S. doesn't have one, I just, I can't wrap my head around that," according to the Reuters report.
Earlier this month, Fed Chair Jerome Powell told a House committee a Fed report on CBDCs would come in early September as the central bank decides on the merits of issuing a digital dollar. Meanwhile, China is in the testing stage of its own CBDC.
Closer to home, Brainard said the proliferation of stablecoins could fragment the payment system without a digital dollar, according to the report.
A digital dollar could also help people without bank accounts to get government aid such as coronavirus pandemic relief payments, Reuters quoted the Fed governor as saying.
Separately, Brainard said she doesn't see any signs that currently high inflation readings are pushing longer-term inflation expectations above the central bank's 2% target.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Kevin Reynolds

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

Kevin Reynolds