Federal Board Member Says More Research Needed on Central Bank Digital Currency

Central bank digital currency (CBDC) has become a hot topic among central banks around the world in the past six months, including Europe, Japan, Canada, and China, all of which have publicly stated that they will study this area. Federal Reserve Board member Lael Brainard said in a public forum yesterday that the authorities are exploring potential research and experiments on blockchain technology and virtual currencies, including the field of CBDC.

The global central bank suddenly discussed high-profile issues about the CBDC. It began in June last year. After Facebook, the world’s largest social platform, announced the Libra plan. Central banks in various countries also began to deploy accordingly to resist the impact of Libra. Brainard pointed out that Facebook has an active user network that accounts for one-third of the world’s population. Libra’s global stablecoin project has made the central bank urgent need to debate what form the currency can take, which people or institutions can issue, and how payments are recorded And settlement issues.

Brainard believes that there are currently many topics that should be studied, such as whether CBDC can reduce costs and operational loopholes; what types of banks or financial institutions can provide accounts for virtual currencies and who can supervise them. “The United States needs to solve many problems before issuing a CBDC,” she said. In particular, the US dollar has a very important position in the global market. Therefore, for the Fed, it needs to stay on the front line when it studies and formulates policies.