We have reported here for some time that despite constant speculation about the Fed moving towards a so called FedCoin CBDC (Central Bank Digital Currency), we did not see any evidence such a thing was on the horizon any time soon. Now we have a Fed official questioning why they need one at all as quoted in this article in Yahoo Finance. This fits with all the other evidence we have seen and direct input from experts in the field. Below are a couple of excerpts from the article.
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"A top Federal Reserve official on Monday advocated against creating a digital version of the U.S. dollar, questioning the use cases and security of a Fed-issued digital currency.
“The potential benefits of a Federal Reserve CBDC [central bank-issued digital currency] are unclear. Conversely, a Federal Reserve CBDC could pose significant and concrete risks,” Randal Quarles told the Utah Bankers Association Monday."
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Click here to read the full article
The Bank for International Settlements (BIS) recently issued this update on global efforts to move forward on CBDC's. While it tries to paint a positive picture about a future for CBDC's, it also lists lots of obstacles and notes that only a handful of central banks have moved beyond just studying the pros and cons. The BIS report also states there are no plans to replace cash and it's just as likely central banks might try using a wholesale version of CBDC's which the public would never see or use just to move money between banks easier. While there is lots of speculation about CBDC's, if you read the actual reports and studies on them, they always list lots of obstacles to overcome and always talk about them as a long term horizon event. Here, the Fed indicates they haven't even decided if they even want a CBDC.
Added note: CNBC offers this more detailed article on these comments. Here is an excerpt:
“First, the U.S. dollar payment system is very good, and it is getting better. Second, the potential benefits of a Federal Reserve CBDC are unclear. Third, developing a CBDC could, I believe, pose considerable risks,” he said. “So, our work is cut out for us as we proceed to rigorously evaluate the case for developing a Federal Reserve CBDC.”
