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Fed’s Lael Brainard hints the US is leading the development of CBDCs

Lael Brainard, a member of the Federal Reserve’s board of directors, encouraged the United States to be a leader in research and policy regarding central bank digital currencies, or CBDCs, because of potential international developments. Brainard said in New York on Friday that the People’s Bank of China pilot program for its digital yuan could affect the dollar’s dominance in cross-border payments and payment systems. However, a digital dollar could allow people around the world to continue to rely on its fiat counterpart. “It is prudent to consider how the potential absence or issuance of a US CBDC could affect the use of the dollar in payments globally in future states where one or more major foreign currencies are issued in CBDC form,” Brainard said. “A US CBDC could be a potential way to ensure that people around the world who use the dollar can continue to rely on the strength and security of the US currency to transact and conduct business in the digital financial system. ” Lael Brainard addresses members of the Senate Banking Committee on Feb. 3. While China makes its CBDC available to international visitors for the Winter Olympics, the US still appears to be in the exploratory phase of rolling out a digital dollar . During her time at the Fed, Brainard has often spoken out in favor of the US issuance of a CBDC, given the fiat dollar’s dominance in international payments. Brainard, nominated to become the next vice chairman of the Federal Reserve, is currently awaiting confirmation from the Senate along with chairman Jerome Powell, future board members Lisa Cook and Philip Jefferson, and vice chairman of supervision Sarah Bloom Raskin. On Tuesday, Republican lawmakers blocked a committee vote on Fed officials, leaving three vacant positions on the board. Related: US legislator proposes bill aimed at restricting the Fed’s ability to issue CBDC. focused on exploring technology used to develop the global financial system. The former recently released the results of a test run for the digital currency. “These technology research and development initiatives are vital to our responsibility to promote a secure and efficient payment system and financial stability whatever the future may bring,” said Brainard.
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