(Reuters) – The Federal Reserve is stepping up its research and other efforts to explore the potential development of a digital version of the U.S. dollar at a time when more consumers are using digital payments and other governments are pushing forward with their own digital currencies, Fed Governor Lael Brainard said on Monday.
As the holder of the world’s reserve currency, the United States must be highly involved as digital payments become more common and other countries develop digital currencies that can be used to send money across borders, she said.
“The Federal Reserve is stepping up its research and public engagement on a digital version of the U.S. dollar,” Brainard said in remarks prepared for a virtual event organized by CoinDesk.
The central bank must also anticipate changing consumer trends and ensure that Americans have access to “safe central bank money” as digital payments become more popular, Brainard said.
The increased availability of digital payment options from private companies also threaten to “fragment” the payment space in a way that could create friction and lock some consumers out, Brainard cautioned.
Major policy questions and technology issues will need to be addressed before the U.S. government can move forward with a digital currency that is inclusive and safe, Brainard said. Policymakers will also need to strike a balance in developing a digital currency that offers households privacy while also preventing illicit activities, she added.
Source: Economy - investing.com
