A regular forum to discuss CBDC
U.S. Treasury Department Undersecretary for Domestic Finance Nellie Liang said Wednesday that multiple government agencies plan to meet regularly to discuss central bank digital currencies (CBDCs).
Liang made a speech at a conference of the think tank Atlantic Council about the policies of the Ministry of Finance-led interagency CBDC working group.
In this, leaders from the U.S. Treasury, the Federal Reserve, and White House agencies such as the Council of Economic Advisers and the National Security Council regularly discuss the potential of CBDCs and other payments innovations. We are going to talk about it.
To serve as a basis for these discussions, he added, the CBDC working group is preparing a report reporting initial findings and recommendations.
The report discusses whether U.S. CBDCs can help achieve policy goals, the capabilities needed to achieve those goals, options for resolving CBDC design shortcomings, and technical aspects. It is said that it is envisioning areas where research and development is desired.
CBDC is still in the ‘consideration stage’
At the conclusion of his speech, Mr. Liang also noted that the United States has not yet decided to issue a CBDC. Currently, it is in the stage of evaluating whether a CBDC in the United States is in the national interest. Liang explains:
The U.S. Treasury Department is leading an interagency CBDC working group to address the broad executive policy objectives of the U.S. CBDC, including global financial leadership, national security, privacy, illicit finance, and financial inclusion. I’m working on a recommendation on what it means.
In addition, he continued that Japan will actively participate in CBDC standard-setting initiatives internationally as well as conduct such studies domestically. It is willing to share technology and knowledge with other countries that are developing CBDC.
What are CBDCs
A digital currency issued by the central bank of a country or region. It stands for “Central Bank Digital Currency”. The big difference from virtual currency is that CBDC is a legal tender. While cost reduction and efficiency improvement can be expected in currency management and settlement, there are many issues to be considered, such as protection of personal information and privacy, security measures, and impact on the financial system.
Three policy goals and CBDC
Liang identified three broader policy goals and areas where CBDC is relevant:
- The global role of the U.S. dollar and U.S. global financial leadership
- national security
- Privacy, illicit funds and financial inclusion
First of all, Mr. Liang, as a personal opinion, with regard to financial leadership, the demand for the US dollar stems from factors such as the economic strength of the United States and the size and openness of the US financial market, and whether or not to have a CBDC is fundamentally different. said it seemed irrelevant.
The working group is also considering the possibility that a US CBDC could help maintain the US dollar’s global standing in terms of functions that traditional central bank money lacks.
Regarding national security, it has been pointed out that the development of CBDC platforms, including multi-currency platforms, developed by foreign governments will reduce the effectiveness of measures taken by the United States when the United States imposes economic sanctions. I explained that there is.
He also mentioned the possibility that overseas CBDC platforms are inadequate in terms of cybersecurity. It is also considering whether the US CBDC and other tools can respond to these risks.
Finally, it is also necessary to evaluate whether the CBDC can protect user privacy, reduce the risk of fraudulent financial transactions, and address issues such as the unbanked population in the United States. said.
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