FED Administrator Lael Brainard; He said digital payments and the development of cryptocurrency are two factors that have helped boost interest in central bank digital currencies (CBDCs).
In a speech Monday at CoinDesk Consensus 2021, Brainard said there are some political issues to resolve before the US considers exporting digital dollars.
These issues; It includes maintaining access to “safe central bank money”, increasing financial participation, increasing payment and clearing efficiency, reducing cross-border friction, completing bank deposits, and protecting both financial stability and personal privacy.
“While distributed ledger technology has the potential to increase efficiency, increase competition and reduce costs, digital assets; The bank poses high risks to the Privacy Act / anti-money laundering, cyber security, price fluctuations, privacy and consumer compliance. The FED actively monitors developments in this area, engages with industry and other regulators, and works to identify any regulatory, supervisory and surveillance framework gaps. ”
Brainard, who served in the US Treasury Department prior to his role in the central bank and has long been a public servant, regulators; He warned that many organizations should pay attention to the digital asset space for many years before they started taking active roles in the industry.
Brainard announced that in 2020, the FED’s Boston branch is researching central bank digital currencies (CBDC) in conjunction with the MIT Digital Currency Initiative. The branch is expected to publish its first report on this research later this summer.
Brainard also spoke about stablecoins in his speech on Monday:
“Unlike central bank fiat currencies, stablecoins do not have a legal tender status. Depending on basic regulations, some may expose consumers and businesses to risk. ”
Brainard also warned that the development of cryptocurrencies could hurt the US payment system, which would increase costs for businesses or households.
The FED executive compared this risk to the crazy banking activities of the 19th century, when private entities issued their own paper money in the US, and said that this period was associated with inefficiency and fraud.
“It is unclear if new forms of cryptocurrencies that refer to fiat currency like Stabilcoin can offer the same level of protection as bank deposits or fiat currency.”