by Victoria Guida – March 2, 2023
A top U.S. Treasury official on Wednesday announced the formation of an interagency working group that will explore the possibility of issuing a central bank digital currency.
The group will be led by Treasury and include leaders from the Federal Reserve and various policy councils within the White House, said Nellie Liang, undersecretary of domestic finance, in a speech at the Atlantic Council.
Officials “will begin to meet regularly to discuss a possible CDBC and other payments innovations” and will develop “an initial set of findings and recommendations,” Liang said.
Among their focuses will be whether a digital dollar would advance U.S. policy objectives around global financial leadership, national security, privacy, illicit finance and inclusion; the features it would need; options for trade-offs among those objectives; and areas where additional technological research would be useful.
Context
This is the broadest and most concrete effort to date by the U.S. government to consider whether the Fed should issue a digital dollar. Chair Jerome Powell has made clear that any such decision will require authorization from both the executive branch and Congress.
But with so many different design choices to consider, this effort will shed light on how officials think a central bank digital currency could best work for the U.S. Within the White House, the interagency group will include the Council of Economic Advisers, National Economic Council, National Security Council and Office of Science and Technology Policy.
More from Treasury
Liang, who is also a former top Fed staffer, made clear that the Biden administration doesn’t yet have a preference for a wholesale CBDC, which would be for interbank use, or a retail CBDC, which would be issued directly to the public, or both.
“Full consideration of these issues … will take some time to complete, but the Working Group plans to provide interim public updates,” she said.
She also said the U.S. plans to weigh in on standard-setting as other countries pursue their own versions of a central bank digital currency.
“We have an interest in ensuring that CBDCs interact safely and efficiently with the existing financial infrastructure; that they support financial stability and the integrity of the international financial system; that global payment systems are efficient, innovative, competitive, secure and resilient; and that global payments systems continue to reflect broader shared democratic values, like openness, privacy, accessibility and accountability to the communities that rely upon them,” she said.
