As digital currencies increasingly infiltrate the financial world, figuring out how to regulate them remains at the top of policymakers' to-do lists. Earlier this year, the Fed released a whitepaper on the topic, closely followed by an executive order from President Biden in mid-March.
One recurring exploratory theme is the notion of issuing a U.S. central bank digital currency (CBDC), which would be a digital version of physical U.S. dollars. Unlike private, decentralized cryptocurrencies such as bitcoin, a CBDC would be a direct liability of the Fed. This would also distinguish the prospective CBDC from the digital money currently available to businesses and individuals through bank accounts known as "commercial bank money," funds that are essentially debt generated by commercial banks. Because the Fed would be acting as the sole counterparty for a U.S. CBDC, the digital fiat currency would entail no liquidity or credit risk.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
- Exclusive discounts on ALM and Treasury & Risk events.
- Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
*May exclude premium content
Already have an account? Sign In
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
