The Fed Issues Paper on the Pros and Cons of Cryptocurrencies!

21 January 2022 Internet, IT & e-Discovery Blog Blog
Author(s): Peter Vogel

The US Federal Reserve issued a paper that “examines the pros and cons of a potential U.S. central bank digital currency, or CBDC, and is the first step in a discussion of whether and how a CBDC could improve the safe and efficient domestic payments system.”  The January 20, 2022 paper entitled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation” included this Executive Summary:

For a nation’s economy to function effectively, its citizens must have confidence in its money and payment services. The Federal Reserve, as the nation’s central bank, works to maintain the public’s confidence by fostering monetary stability, financial stability, and a safe and efficient payment system.

This paper is the first step in a public discussion between the Federal Reserve and stakeholders about central bank digital currencies (CBDCs). For the purpose of this paper, a CBDC is defined as a digital liability of a central bank that is widely available to the general public. In this respect, it is analogous to a digital form of paper money. The paper has been designed to foster a broad and transparent public dialogue about CBDCs in general, and about the potential benefits and risks of a U.S. CBDC. The paper is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a U.S. CBDC.

This is a good sign of things to come!

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