Federal Reserve remains neutral on CBDCs in highly-anticipated report

US flag in front of the wifi symbol

What 

The Federal Reserve finally released its report on CBDCs this week but instead of taking a stance on policy, the report provides a very academic breakdown of CBDCs 

Why 

The mild response comes as other nations have ramped up efforts to roll out their own CBDCs

What next 

The US public has until May 2022 to give input, after which the central bank may provide more clarity on the way forward 

The story 

The cryptocurrency industry has been waiting anxiously for the release of the paper only to be met with a very diplomatic stance on the matter by the Federal Reserve. In “Money and Payments: The U.S. Dollar in the Age of Digital Transformation”, no reference is made to policy outcome. 

“The paper is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a U.S CBDC,” the report says. 

The report, notes the Fed, is the first step in a public discussion on CBDCs between all stakeholders.

The central bank is clear that it won’t move forward with a CBDC without the backing of Congress and the executive branch. 

Jerome Powell, Chair of the Federal Reserve, said in March the US won’t be lured into a race with other countries to implement a CBDC.

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