The US Fed Looking into Digital Currency Prospect

The United States’ Federal Reserve is studying the feasibility of issuing a digital currency, FED Governor Lael Brainard revealed on Wednesday.

Speaking at a conference on Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term at the Stanford Graduate School of Business, Brainard said: “Given the dollar’s important role, it is essential that we remain on the frontier of research and policy development regarding [central bank digital currency].”

“We are conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC.”

Her statement came as multiple leading central banks are studying the feasibility to issue a digital currency, thus minimizing the dominance of the US dollar in global trade.

“By transforming payments, digitalization has the potential to deliver greater value and convenience at lower cost,” she said, mentioning the benefits of digital currency.

Libra rang the bell

Facebook’s attempt to launch Libra also raised the alarm among the regulators about the privatizations of the monetary system.

“Because Facebook has an active user network of one-third of the global population, the company’s Libra global Stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term project has imparted urgency to the debate over what form money can take, who or what can issue it, and how payments can be recorded and settled,” Brainard added.

She also pointed out that the monetary regulator needs to study several prospects, including the cost reduction measure of CBDC and the possibility of any operational vulnerability, the categorization of banks and financial institutions offering the digital currency, and also the stability risks associated with such step.

In a recent report, the Bank for International Settlements and the International Monetary Fund have also asked the central banks to at least study the feasibility of issuing a digital currency.

“These are some of the issues that would need to be addressed before deciding to issue a CBDC in the United States,” she said.