Lyle Brainard, a member of the Federal Reserve Board of Governors, urged the United States to be a leader in research and policy on central bank digital currencies or central bank currencies due to potential international developments.
In a speech to the US Monetary Policy Forum in New York on Friday, Brainard said that the People’s Bank of China’s digital yuan pilot program could have implications for dollar dominance in cross-border payments and payment systems. However, the digital dollar may allow people around the world to continue to rely on their monetary counterpart.
“It is prudent to consider how the potential absence or issuance of a US Federal Reserve’s digital currency could affect the use of the dollar for payments around the world in future countries where one or more major foreign currencies are issued in the form of a CBDC,” Brainard said. . “A US Federal Reserve digital currency could be a potential way to ensure that people around the world who use dollars can continue to rely on the strength and security of the US currency to conduct transactions and conduct business in the digital financial system.”
Lyle Brainard speaks before the Senate Banking Committee on February 3rd.
While China lends its digital currency to central banks for foreign visitors to the Winter Olympics, it appears that the United States is still in the development phase of a digital dollar. During his time in the Federal Reserve, Brainard often advocated the issuance of US digital currencies by the central bank, given the dominance of fiat dollars in international payments.
Brainard, who was named vice president of the Fed, is currently awaiting confirmation from the Senate along with board chairman Jerome Powell, potential board members Lisa Cook and Philip Jefferson, and supervisory vice president Sarah Bloom Ruskin. On Tuesday, Republican lawmakers blocked a vote by the Federal Reserve Officers Committee, leaving three board members vacant.
About the topic: US legislator proposes bills aimed at limiting the Federal Reserve’s ability to issue digital currency to the central bank
The potential vice president of the Federal Reserve also mentioned the Federal Reserve Bank of Boston’s CBDC development project and the MIT Digital Currency Initiative, as well as the New York Innovation Center study, an initiative to study the technologies used to develop the global financial system. The first recently published results of a test launch of a digital currency.
“These technology research and development initiatives are crucial to our responsibility to promote a secure and efficient payment system and financial stability in the future,” said Brainard.