The U.S. central bank has been working on creating a digital dollar, according to a recently published transcript from Federal Reserve Board Governor Lael Brainard. On Thursday, she told participants attending “San Francisco’s Innovation Office Hours” webcast, that the Fed has been “collaborating with researchers at the Massachusetts Institute of Technology (MIT)” toward building a CBDC codebase.
The central bank cold wars have begun, as the United States clearly wants to compete with China’s upcoming central bank digital currency (CBDC). Not too long ago, the Federal Reserve Chair Jerome Powell didn’t give the media too many clues about the bank’s efforts to create a digital dollar.
Powell acted as though the central bank was simply investigating the possibilities of a CBDC, but nothing more than that. Federal Reserve Board Governor Lael Brainard seems to be telling a different story.
Brainard discussed the subject in a webcast published on August 13, which was conveniently called “An Update on Digital Currencies.” The Board Governor explained that the coronavirus outbreak was a reminder of how far behind the country is with regard to digital currency payments.
“The Covid-19 crisis is a dramatic reminder of the importance of a resilient and trusted payments infrastructure that is accessible to all Americans,” Brainard stressed. The Fed executive further stated:
It was notable that after a sharp reduction in spending early in the COVID-19 crisis, many households increased their spending starting on the day they received emergency relief…