Today Federal Reserve Governor Lael Brainard spoke about central bank digital currencies (CBDC), stating the use of a foreign CBDC for cross border payments is one of the drivers behind the Fed’s interest. Other key takeaways from her Consensus talk were continuing reservations about stablecoins and additional regulation of crypto-assets using a framework shared across regulators.
In her prepared comments, Brainard mentioned cross border usage of a foreign CBDC as one of four areas that are “sharpening the focus on CBDCs”. The others were stablecoin risks, the move away from cash to digital, and the need to address the unbanked and underbanked highlighted by pandemic government payments.
Talking about a foreign CBDC, she said, “to the extent that it’s designed for prominent use in cross border payments, that does potentially have significant effects across the globe. So it is very important for us to follow many central bank’s progress on CBDC closely, including China.”
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