There has been a sudden rise in the talks of central bank digital currencies (CBDCs) across the globe. Joining the club is the United States, which has briefed about their plans regarding their CBDC.
In a speech delivered to the Atlantic Council in Washington, Nellie Liang, under secretary for domestic finance at Treasury, said that the U.S. Treasury, the Federal Reserve, and the White House officials “will begin to meet regularly” to talk about a possible CBDC.
Sources reveal that the Treasury-led CBDC working group will study the issue further and complement the Fed’s ongoing research into a digital Dollar. Notably, in September last year, the Treasury recommended the working group in one of the digital asset policy papers.
In her speech, the under secretary emphasized that the working group does not necessarily hint at a shift in the national policy to issue a digital Dollar and the Fed will still be in a lead research role. Liang also mentioned that the Fed has acknowledged that the CBDC would be issued with the help of executives and lawmakers and public opinion will be taken into consideration. She said:
The Fed has also emphasized that it would only issue a CBDC with the support of the executive branch and Congress, and more broadly the public.
According to Liang, the digital Dollar could either be retail or wholesale. She also explained that a wholesale CBDC would be accessible to financial institutions that are already eligible for central bank accounts whereas a retail CBDC would be a complement to cash, and not replace it. She also said that the CBDC would be issued with full consideration of the issues and hence that would take time. In her words:
Full consideration of these issues for a possible CBDC – wholesale, retail, or both – will take some time to complete, but the Working Group plans to provide interim public updates
Sources reveal that while the Fed here said that it would only issue a CBDC if it receives support from the executives and Congress and the public, several Fed leaders have made public remarks indicating that a push for a digital dollar is not imminent. One of these names includes Lael Brainard who is amongst the Fed’s most-engaged leaders on the issuance of the digital Dollar and now has been appointed as the National Economic Council director, a top White House advisory position to President Joe Biden.
Not just that, on Tuesday, Daleep Singh, a former economic advisor for President Joe Biden told U.S. Senators that the administration was very willing for a digital Dollar as a means to crowd out private cryptocurrencies that facilitate ransomware and sanctions violations. Notably, these incidents can be counted as positive measures toward the digital Dollar when compared to the nation’s older skepticism.