USA Is Looking Closely To Launching Its Own Cryptocurrency, According To Fed Governor Lael Brainard

The U.S. Federal Reserve is experimenting with blockchain technology to establish potential use cases for a central bank digital currency (CBDC). Fed’s Governor Lael Brainard said this in a recent speech, but she also noted that risks still exist, and they have to be addressed before launching a digital currency.

The U.S. Contemplating A CBDC

As reported by Reuters, Federal Reserve Governor Lael Brainard recently mentioned the country’s potential involvement in central bank digital currencies, or CBDCs. According to her, the U.S. central bank is researching the feasibility of issuing a digital currency.

“We are conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC.

We are collaborating with other central banks as we advance our understanding for central bank digital currencies.”

Cryptopotato recently reported that a survey from the Bank of International Settlements (BIS) regarding the emerging trend of CBDCs. The findings were that 80% of all participating banks are working on launching their own digital currency.

Brainard also noted the extreme competition in the field and added that there are “a set of reasons to also be making sure that we are the frontier of both research and policy development.”

Facebook’s Libra Changed The Game

Interestingly enough, less than two years ago, Brainard appeared extremely against the idea of launching a CBDC. Aside from all regulatory hurdles that she mentioned, Fed’s Governor also indicated that “there is no compelling demonstrated need for a Fed-issued digital currency.”

Now, though, the situation has changed dramatically as she referred to Facebook’s plans to launch its own cryptocurrency – Libra. Brainard said that ever since it was announced last year, it brought “imparted urgency” around the digital currency topic.

The Governor believes that projects similar to Libra could deliver additional risks, which need to be addressed before the product is live:

“Some of the new players are outside the financial system’s regulatory guardrails, and their new currencies could pose challenges in areas such as illicit finance, privacy, financial stability, and monetary policy transmission.” according to Brainard.

Ultimately, she seemed more optimistic regarding the positive benefits of digital currencies, and concluded that “by transforming payments, digitization has the potential to deliver greater value and convenience at a lower cost.” Despite Facebook intentions, the Libra project may not come alive, according to Facebook itself.