Fed’s Lael Brainard pushes up digital dollars as central bank currency competition intensifies

US Federal Reserve Board of Governors Rael Brainard will attend the “Fed Listens” event on October 4, 2019 at the Federal Reserve Headquarters in Washington, DC.

Eric Baradat | AFP | Getty Images

Federal Reserve Board Governor Lael Brainard demanded a digital dollar on Monday, saying central bank-backed cryptocurrencies could bring a variety of benefits.

Providing financial services to nearly one in five Americans who are considered “bank shortages” is one of the benefits Brainard Quoted in a conference speech announced by CoinDesk..

She also mentioned the security, efficiency and cross-border payments of federal-backed systems, or improved transactions between people from different countries.

While emphasizing the importance of moving forward cautiously, Brainard said the Covid-19 pandemic increased the need for a system that would allow a wide range of people to access well-regulated digital money. ..

“The Federal Reserve continues to promise that people have access to safe, reliable and secure payment methods, including cash,” she said. “As part of this effort, we need to investigate and predict the extent to which household and corporate needs and preferences may move further into digital payments over time.”

These comments came a few days after the Fed Chair Jerome Powell announced the central bank this summer. Release working paper Addresses multiple issues related to central bank digital currencies.

The Federal Reserve Bank of Boston and MIT have launched a joint project to set up a virtual model. Several other Fed districts are also engaged in their own research.

In essence, the development of the CBDC gives consumers greater access to electronic currencies. Such things are widespread with the use of Bitcoin and its myriad of companions.Central bank of China Moving forward Like many other projects around the world, it has its own project.

Brainard said the pandemic gave an example of how important federal-backed currency development is.

Some did not receive their payments for weeks because they did not have an account or their information was not updated on the IRS when Congress first began sending relief payments. She said the CBDC would help those people make more money faster.

“In the United States, the pandemic has accelerated the transition to digital payments and increased cash demand,” Brenard said in a prepared statement. “While the use of cash surged at certain times, consumers and businesses have made a significant shift to contactless payments driven by electronic payments.”

Brainard said that without naming a particular cryptocurrency, alternative payment systems present multiple issues, including potential fraud.

“In contrast, the digital dollar will be a new type of central bank money issued in digital form for use by the general public,” she said. “By introducing secure central bank money available to homes and businesses in digital payment systems, CBDC mitigates the risk of counterparties and the associated risks of consumer protection and financial stability.”

The Fed does not schedule that currency. FedNow Service, a payment system similar to digital dollars in a sense, is expected to appear within two years.

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Fed’s Lael Brainard pushes up digital dollars as central bank currency competition intensifies

Source link Fed’s Lael Brainard pushes up digital dollars as central bank currency competition intensifies

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