Not surprisingly, the discussion paper tiptoes around the hotly debated 🔥 possibility of CBDC adoption in the U.S. Although it offers no clarity of when — or if — one will be issued, it did shed light into what it would take for a CBDC to be successful in America.
“The Federal Reserve’s initial analysis suggests that a potential U.S. CBDC, if one were created, would best serve the needs of the United States by being privacy-protected, intermediated, widely transferable and identity-verified,” the paper says.
In other words, The Fed recommends intermediaries like commercial banks 🏦 step in as gatekeepers rather than consumers using personal accounts at central bank locations to access digital dollars.
Unlike cryptocurrency, a CBDC would be issued and backed by the central bank. But it would differ from electronic transactions that happen through commercial banks and instead could give consumers a direct claim to the central bank akin to physical cash. 💵
The Fed also highlighted concerns, including financial stability and maintaining the U.S. dollar’s dominance as well as protecting consumer privacy. 🕵️