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.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.