Posted on 05/24/2021 8:29:41 AM PDT by delta7
Federal Reserve Governor Lael Brainard pressed the case for a digital dollar, saying Monday that a cryptocurrency backed by the central bank could provide a variety of benefits.
Providing financial services to the nearly 1 in 5 Americans considered “underbanked” is one of the advantages Brainard cited in a speech to a conference presented by Coindesk.
She also cited the safety of a Fed-backed system, as well as improvements in efficiency and cross-border payments, or transactions between people in different countries.
While stressing the importance of moving forward carefully, Brainard said the Covid-19 pandemic strengthened the need for a system in which a broad swath of the public has access to well-regulated digital money.
“The Federal Reserve remains committed to ensuring that the public has access to safe, reliable, and secure means of payment, including cash,” she said. “As part of this commitment, we must explore — and try to anticipate — the extent to which households’ and businesses’ needs and preferences may migrate further to digital payments over time.”
Those comments come days after Fed Chairman Jerome Powell announced that the central bank this summer would be releasing a working paper that addresses multiple issues involving Central Bank Digital Currencies.
The Boston Fed and MIT have launched a joint project in which they will set up a hypothetical model, and several other Fed districts also are involved with research of their own.
Essentially, the development of the CBDC would give consumers broader access to electronic currency, the likes of which have been popularized with the use of bitcoin and its myriad peers. China’s central bank has been moving forward with its own project as have various others around the world.
Brainard said the pandemic presented an example of how important developing a Fed-backed currency could be.
When Congress began sending relief payments at the outset, some individuals didn’t get theirs for weeks because they either did not have accounts or their information was not updated with the IRS. A CBDC would help get money more quickly to those people, she said.
“In the United States, the pandemic led to an acceleration of the migration to digital payments as well as increased demand for cash,” Brainard said in prepared remarks. “While the use of cash spiked at certain times, there was a pronounced shift by consumers and businesses to contactless transactions facilitated by electronic payments.”
Brainard noted, without naming specific cryptocurrencies, that alternate payment systems present multiple problems, including potential fraud.
“In contrast, a digital dollar would be a new type of central bank money issued in digital form for use by the general public,” she said. “By introducing safe central bank money that is accessible to households and businesses in digital payments systems, a CBDC would reduce counterparty risk and the associated consumer protection and financial stability risks.”
The Fed has not set a timetable for its currency. The FedNow Service, which would be a payments system that in some ways would resemble a digital dollar, is expected to come in line in two years.
Certainly sounds like a solution in search of a problem. Follow the money and you’ll find it is not for you.
Pull the charter for the Creature from Jekyll Island and send it back to hell where it came from.
1 in 5 are underbanked? 1 in 5 are illegal or on the streets, they don’t need a bank.
Return to gray/black market barter system...
A digital dollar is just another fiat dollar that will be inflated into oblivion. But this comes with special features! The government can see every move you make, suck the account dry for a dozens of reasons, restrict you from accessing it if you are able to flee out of the country, decide what things you may and may not buy with it.
But wow! It’s DIGITAL!
And the ‘underbanked’ include many men who don’t want to be garnished for child support.
I do NOT use a cell phone & I WILL NOT.
“pressed the case for a digital dollar”
though 99.99999999999% of all dollars are already digital-only ...
Sounds like a problem for the divorce court and not one that should have anything to do with the rest of us.
I have a feeling this will happen fast. First the gov gets into a digital currency. Then it eliminates cash. Then it seizes control over all money accounts and transactions, then what little freedom we had is gone.
I have a debit card with a chip in my wallet.
The only problem I could imagine involves the merchant fee levels. In Europe and Canada, they are low.
“Then it eliminates cash. Then it seizes control over all money accounts and transactions”
Ebay says - X bought a $600 book from Y
reality is - X bought a $1 book (and $599 of recreational drugs) from Y
They obviously don’t want us to have cash which can’t be tracked or controlled. Lockdowns, masks, “vaccines,” monetary transactions. They can NEVER have too much control.
I have a card I use only for online ordering. All local purchases are done with cash.
Cards can be tracked but not controlled. That’s the next step.
Digital dollars, run by the government. I can see Biden and his minions saying "You have too much money!", then quickly removing 50 percent of your digital dollars, for the good of others of course. Bye bye money savings.
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