Potential Fed vice chair: “A U.S. CBDC could be one way to make sure that people all over the world who use the dollar can still rely on the strength and safety of U.S. currency to trade and do business.”
It might be good for the United States to be a leader in research and policy on “central bank digital currencies,” or CBDCs, because of what might happen in other countries.
When Brainard spoke at the U.S. Monetary Policy Forum in New York on Friday, he said that the People’s Bank of China’s pilot program for its digital yuan could change the dollar’s dominance in cross-border payments and payment systems. A digital dollar, on the other hand, could let people all over the world keep using its real-world counterpart, the dollar.
U.S. Treasury Secretary Timothy F. Brainard says it’s important to think about how not having a U.S. CBDC could affect how the dollar is used around the world when one or more major foreign currencies are issued in CBDC form. A U.S. CBDC could be one way to make sure that people around the world who use the dollar can still use it to make transactions and do business in the digital financial system.
When people from outside China come to the Winter Olympics, they can use China’s CBDC. The U.S., on the other hand, still doesn’t seem to be ready to use a digital dollar. The U.S. should issue a CBDC because the dollar is so important in international payments. Brainard has said this many times during her time at the Fed.
Brainard, who was nominated to be the next vice chair of the Federal Reserve, is still waiting to be approved by the Senate, along with Jerome Powell, Lisa Cook, and Philip Jefferson. Sarah Bloom Raskin, who was nominated to be the next vice chair for supervision, is also waiting. On Tuesday, Republicans on a committee blocked a vote on the Fed officials, leaving three empty seats on the board.
He also talked about a project from the Federal Reserve Bank of Boston and the MIT Digital Currency Initiative, as well as research from the New York Innovation Center, which is looking into how technology can be used to build a better world economy. The results of a test run for the digital currency were recently made public by the first.
Brainard: “These technology research and development projects are important to our work to keep the payment system safe and stable, no matter what the future holds.”
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
