The U.S. Federal Reserve’s report on central bank digital currencies (CBDCs) released on Thursday did not contain policy recommendations or decisions on digital dollar issuance.
- The paper acknowledged that the Fed will not proceed in creating a digital dollar without clear support from lawmakers, ideally through a specific authorizing law.
- The Fed said that its 40-page report is the “first step in a broad consultation” and made a request for public comments.
- CBDCs are cryptocurrencies issued by central banks and the U.S. is lagging behind other countries in developments, including China whose e-CNY is set to take the stage at the upcoming Winter Olympics.
- The Fed said that a CBDC would increase payment speed and options for Americans but also posed a risk to financial stability and personal privacy.
- Nine countries have fully launched CBDCs, most recently the e-Naira in Nigeria.