Fed wants to be in the race – The US Federal Reserve continues its research on a central bank digital currency (MNBC / CBDC). Several regional federal banks are currently working on the subject.
Several federal banks are working on MNBCs
This was said Loretta Mester , president of the Bank of the Federal Reserve Bank of Cleveland, in a virtual conference on Wednesday 23 September.
Thus, the Board of Directors of the Fed would be testing different distributed ledger platforms. Remember that it has a dedicated technological laboratory . According to Loretta Mester, several members of different regional federal banks are involved in the research.
For example, the Federal Reserve Bank of Boston has worked for several years with the Massachusetts Institute of Technology (MIT) to develop a Bitcoin Trader. The Federal Reserve Bank of New York is doing the same, in partnership with the Bank for International Settlements .
Experiments against the backdrop of a pandemic
Loretta Mester specifies that these experiments aim to explore the costs and benefits of MNBCs. This does not mean that the Federal Reserve intends to adopt such a currency:
“An experiment like this is an important ingredient in assessing the benefits and costs of a central bank digital currency, but does not signal any Federal Reserve decision to adopt such a currency. […] The issues raised by central bank digital currencies related to financial stability, market structure, security, privacy and monetary policy all need to be better understood. “
According to Mester, the Covid-19 pandemic has transformed the payments industry in the United States. The latter requires better connectivity and the volumes of domestic transfers have exploded.
The Central Bank of the Bahamas recently launched its CBDC. Christine Lagarde mentioned the digital euro at the start of the week. It is therefore the Fed’s turn to revive the subject of a central bank digital currency. So far, China is the country most committed to launching its digital currency