When autocomplete results are available use up and down arrows to review and enter to select.
The Federal Reserve Board released a long-awaited discussion paper that examines the pros and cons of a potential U.S. central bank digital currency, or CBDC.
Background: With policymakers debating a potential U.S. CBDC, the paper summarizes the state of the domestic payments system and discusses new types of digital payment methods and assets, including stablecoins and other cryptocurrencies.
Key Considerations: While the Fed said its paper does not favor any policy outcome, it identifies specific policy considerations, such as:
Balancing consumer privacy protections with transparency to deter criminal activity.
Using intermediaries to leverage the private sector and avoid systemic disruptions.
Ensuring a CBDC is readily transferable between customers of different intermediaries.
Supporting compliance with anti-money-laundering and anti-terrorist-financing rules.
Comments: The Fed invited public comment on the paper within 120 days. ICBA is reviewing the paper and will submit comments.
More: ICBA offers a series of blog posts on community bank CBDC considerations, including CBDC myths, where the U.S. stands in the CBDC race, why community banks should have an intermediary role, and a CBDC primer for community banks.