The United States Federal Reserve Board of Governors has released a discussion paper on a potential US central bank digital currency (CBDC) titled “Money and Payments: The US Dollar in the Age of Digital Transformation.”
It soon became clear that there were many confidently stated opinions but little agreement among them. The main points in common are in the places where they are perplexed.
As the Fed wants to be known appropriately for its purpose, the Fed paper provides a broad overview of central bank digital currencies and the topics adjacent to central bank digital currencies without much depth.
The Institute of International Finance is a global financial industry consortium with more than 450 members from more than 70 countries, whose membership includes commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks, and development banks.
The Institute of International Finance answered all 22 questions proposed by the Federal Reserve while remaining unconscious about the advantages of creating a digital currency for the US central bank.
“The business model needs to work,” said Renee. “If the risks outweigh the incentives, it may only attract intermediaries that rely on selling user data, like tech companies. That’s not good for consumers.”