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The Federal Reserve is not any closer to making a decision on a central bank digital currency (CBDC), the Fed\u2019s Michael Barr said in a speech on Friday.<\/p>\n
The Vice Chair for Supervision added that \u2014 as companies and central banks continue to mull stablecoins and CBDCs \u2014 \u201cwe must carefully weigh the benefits and risks of different uses of these new technologies.\u201d<\/p>\n
Barr reiterated that the Fed continues to explore and research \u201cemerging technologies that might support a CBDC payments backbone, or for other purposes in the existing payments system.\u201d<\/p>\n
\u201cThe research is currently focused on end-to-end system architecture, such as how ledgers that record ownership of and transactions in digital assets are maintained, secured and verified, as well as tokenization and custody models,\u201d he continued<\/a>.<\/p>\n While a US CBDC<\/a> is just a figment of the imagination right now, some in Congress are seeking to ensure that privacy is protected<\/a> by any form of a digital dollar that comes to fruition \u2014 and others are focused on making sure a CBDC never leaves the research stage.<\/p>\n \u201cAs policymakers, we should be asking questions about how a digital dollar could be designed to maximize privacy and prevent exploitation of personal data,\u201d Rep. Stephen Lynch D-Mass., said back in September.<\/p>\n Some democrats \u2014 including Maxine Waters (D-CA) \u2014 have called Republicans out for their anti-CBDC stances and legislation.\u00a0<\/p>\n Waters said in September that the Central Bank Digital Currency Anti-Surveillance State Act would prevent the Fed from researching a potential CBDC<\/a>.<\/p>\n Rep. Tom Emmer (R-Minn.), argued that the bill<\/a> was just aiming to prevent President Biden from issuing a \u201cfinancial surveillance tool\u201d with the ability to \u201cundermine the American way of life.\u201d<\/p>\n Politicians in DC aren\u2019t the only ones voicing concerns, either. RBC Wealth Management published a report at the end of August<\/a> focused on privacy and security issues.<\/p>\n \u201cCombining all financial information in one spot is a step-change higher in potential informational abuses,\u201d RBC wrote.<\/p>\n Despite concerns about privacy, the Bank of International Settlements said roughly 93%<\/a> of central banks surveyed are looking into \u201csome form\u201d of a CBDC.\u00a0<\/p>\n Barr, in his speech Friday, also emphasized the need for \u201cinternational collaboration and coordination in payments systems.\u201d<\/p>\n A point echoed in a speech from the Bank of International Settlements general manager Agustin Carstens in late September.<\/p>\n Carstens said that countries considering CBDC implementation<\/a> have to \u201cdecide whether to issue CBDC and how to balance the rights and obligations of its users at a national level.\u201d\u00a0<\/p>\n \u201cInternational coordination and cooperation is critical,\u201d he added. Central banks, such as the Monetary Authority of Singapore, are also focusing on interoperability<\/a> as they continue their research.<\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\n
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