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Federal Reserve Looking into Issues Encircling Fedcoin

Federal Reserve Looking into Issues Encircling Fedcoin

The Federal Reserve has several issues around digital funds and currencies, including policy, design, and legal issues around doubtlessly issuing its own digital currency, Governor Lael Brainard stated Wednesday.Federal Reserve Looking into Issues Encircling Fedcoin

Brainard’s comments suggest more openness to the possibility of a Fed-issued digital currency than in the past.

Central banks around the world are debating methods to manage digital finance technology and the distributed ledger systems utilized by bitcoin, which guarantees near-instantaneous payment at doubtlessly low cost.

The Federal Reserve is creating its own round-the-clock real-time payments and settlement service and is currently reviewing 200 comment letters submitted late in 2019 in regards to the proposed service’s design and outlook, Brainard stated.

However, the Federal Reserve is also, she stated, “conducting research and experimentation linked to distributed ledger technologies and their potential use case for digital currencies, including the potential for a central bank digital currency.

Dozens of central banks worldwide are doing such work, a recent worldwide study confirmed, with China moving ahead on plans to launch a digital currency.

Less than two years ago, Brainard informed a conference in San Francisco that there’s “no compelling demonstrated need” for such a currency.

However, that was before the scope of Facebook’s digital forex ambitions had been broadly known. Federal Reserve executives, along with Brainard, have raised concerns about client protections and data and privacy warnings that could be posed by a currency that would come into use by the third of the world’s population that have Facebook accounts.