Yesterday Federal Reserve Governor Michelle Bowman expressed reservations about the potential to issue a wholesale CBDC on a Unified Ledger, a BIS concept. The Bank for International Settlements (BIS) proposal would see central bank digital currency (CBDC), tokenized deposits and regulated digital assets settle on the same network.
Governor Bowman’s reservations are not about wholesale CBDC per se, but the risk of allowing “central bank money to circulate on a platform that is not owned and operated by the central bank.” The Governor acknowledged another route involves central banks maintaining their own ledgers. However, she views the term ‘wholesale CBDC’ as a misnomer because central bank money is already used for wholesale transactions.
Meanwhile, the New York Fed’s innovation arm participated in a Regulated Liability Network (RLN) trial earlier this year. The RLN is a similar concept to the Unified Ledger and arguably inspired it. We’ve found that some commercial banks embrace the Unified Ledger concept. Others see it as a long term North Star to move banks towards interoperability, but is too hard to achieve.
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