Executive Summary:
"This paper is the first step in a public discussion between the Federal Reserve and stakeholders
about central bank digital currencies (CBDCs). For the purpose of this paper, a CBDC is defined as
a digital liability of a central bank that is widely available to the general public. In this respect, it is
analogous to a digital form of paper money. The paper has been designed to foster a broad and
transparent public dialogue about CBDCs in general, and about the potential benefits and risks of
a U.S. CBDC. 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."
Digital Assets:
"To address the risks of payment stablecoins, the PWG report recommends that Congress act
promptly to enact legislation that would ensure payment stablecoins and payment stablecoin
arrangements are subject to a consistent and comprehensive federal regulatory framework. Such
legislation would complement existing authorities regarding market integrity, investor protection,
and illicit finance."
Central Bank Digital Currency:
"Like existing forms of commercial bank money and nonbank money, a CBDC would enable the general public to make digital payments. As a liability of the Federal Reserve, however, a CBDC would
not require mechanisms like deposit insurance to maintain public confidence, nor would a CBDC
depend on backing by an underlying asset pool to maintain its value. A CBDC would be the safest
digital asset available to the general public, with no associated credit or liquidity risk."
Seeking Comments & Next Steps:
"The Federal Reserve will only take further steps toward developing a CBDC if research points to
benefits for households, businesses, and the economy overall that exceed the downside risks, and
indicates that CBDC is superior to alternative methods. Furthermore, the Federal Reserve would
only pursue a CBDC in the context of broad public and cross-governmental support.
The Federal Reserve welcomes comments from all stakeholders on the questions listed below. The Federal Reserve will also conduct targeted outreach and convene public forums to foster a
broad dialogue about CBDC.
Please provide any answers to questions by May 20, 2022, using the form at
https://www.federalreserve.gov/apps/forms/cbdc .
It is not a requirement that all questions be answered."
https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf
Related stories;
"Recently, Central Bank Digital Currency (CBDC) has emerged as a hot topic in the financial world. Several Central Banks are running analyses and studies investigating the technical and economic feasibility of the introduction of digital money and the impact it might have on monetary policy, liquidity, etc."