Preparing for a Digital Dollar

Regardless of the exact structure of a future U.S. CBDC, as well as the accompanying consumer protections and regulatory controls which would have to be hammered out by the Fed and lawmakers, businesses can anticipate the issues they would have to navigate to accommodate a new digital fiat currency. These include:

Compliant money-transfer policies. Because a CBDC would run on distributed ledger technology, corporate financial risk managers would need to pay close attention to both risk mitigation and regulatory adherence, including anti-money laundering (AML) and Know Your Customer (KYC) measures.
Digital payment acceptance. Corporate finance departments should prepare to use and accept digital dollars for both business-to-business and consumer payments, including cross-border payments from suppliers or customers located in countries that have their own CBDCs.
Operational and strategic considerations. Companies accepting and paying in digital dollars would need a means of imposing guardrails against situations such as suppliers claiming they never received a payment sent over the blockchain.
Cybersecurity. Doing business in digital dollars would make it more important than ever before for companies to maximize security protocols to prevent a security breach, including a ransomware attack that might threaten to release sensitive information, such as medical or financial records, unless payment was made in the CBDC.
Regulatory compliance. Companies that are subject to industry-specific regulations around recordkeeping and reporting would need to take steps to document their digital dollar transactions in all the countries where they do business.
Corporate governance. Corporate audit and risk management committees need to educate themselves about the business implications of CBDCs, including current regulatory requirements, and to implement enhanced oversight to ensure that they continue to be able to make informed decisions as CBDC-related issues arise.

Instant Insights /

A CBDC for the United States

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