Fed Researching Digital Dollar, Says Governor Lael Brainard

In a speech delivered at a conference on the future of payments at the Stanford Graduate School of Business in California, Federal Reserve governor Lael Brainard shared that the Fed is studying the potential for a digital dollar. “By transforming payments, digitalization has the potential to deliver greater value and convenience at lower cost,” Brainard said. “Given the dollar's important role, it is essential that we remain on the frontier of research and policy development regarding CBDC.”

Why it matters:

• Facebook’s Libra and China’s blockchain announcements have brought cryptocurrency center stage for global policy makers, treasury, and central bank heads. The race is on.
• As Circle CEO, Jeremy Allaire shared in a blog post this week regarding Davos, “throughout a range of public and private sessions convened inside the Forum [Davos], the discussion centered on global stablecoins and models of digital currency backed by central bank money. In meetings I held with supra-national policymakers, treasury and central bank heads, there was intense interest in learning and in mapping out policy responses.”