Is the US moving towards CBDC? Treasury, Fed, and White House officials to meet regularly

The U.S. Deputy Secretary of the Treasury for Domestic Finance, Nellie Liang, stated during a speech at the Atlantic Council in Washington that officials from the U.S. Treasury Department, the Federal Reserve, and the White House will begin regular meetings to discuss the possibility of a central bank digital currency (CBDC).

The CBDC working group led by the Treasury Department will further explore this topic and assist in the ongoing digital dollar research by the Federal Reserve. Liang emphasized that the establishment of the working group does not signify a policy shift in the U.S. regarding the digital dollar. The Federal Reserve remains in the lead role for research, while the CBDC working group aims to provide recommendations related to the impact of a U.S. CBDC on policy goals through a broader government perspective, which will contribute to global financial leadership, national security, privacy, illicit finance, and inclusivity.

All options for CBDC need to be carefully considered, and the working group plans to provide periodic updates on meeting outcomes.

Advertisement - Please scroll down for more content

Federal Reserve officials have previously emphasized that they would only consider issuing a CBDC with support from the executive branch, Congress, and broad public backing.

New York Federal Reserve Bank's Multiple Initiatives

The Federal Reserve has been carrying out various initiatives in recent years. The New York Federal Reserve Bank has established a strategic partnership with the Bank for International Settlements (BIS) and previously conducted a wholesale CBDC simulation test through Project Cedar.

Under its New York Innovation Center (NYIC), in collaboration with members of the U.S. banking and payments industry, a Proof of Concept (PoC) project was launched last November to explore the feasibility of an interactive digital currency platform under the regulated responsibility network RLN, including CBDC.

Lael Brainard Appointed as Director of the National Economic Council (NEC)

Former Federal Reserve Vice Chair Lael Brainard submitted her resignation on February 14, having served as a member of the Board of Governors since June 16, 2014, and as Vice Chair since May 23, 2022. She was also a key advocate for the "FedNow Service" real-time payment infrastructure. Throughout her tenure, Brainard has repeatedly emphasized the importance of CBDCs, stating that the U.S. cannot afford to be without one, especially as other countries are racing to issue their own CBDCs. The continued expansion of stablecoins could also impact the dominance of the U.S. dollar.

In February of this year, U.S. President Biden announced Lael Brainard's appointment as Director of the National Economic Council (NEC). The NEC is responsible for coordinating domestic and international economic policy decisions in the United States and advising the President on economic matters. Brainard's new role as Director is akin to being President Biden's top economic advisor. Whether Brainard's transition in position will bring more momentum to policy initiatives will be a focal point of ongoing external scrutiny.