“This is a global pandemic, and demand for consumer-to-consumer and cross-border payments has risen [..] Some payments technology is more resilient, scalable, and adaptable to such rapid changes in user behavior and volume.”
CBDC Research in US Well-UnderwayWith the pandemic underway, the payments sector has had the opportunity to turn to CBDCs, an idea which had already gained the interest of central banks in the past few years. As such, the CEO elaborated on the proposal for the Federal Reserve to issue “digital dollars” directly to Americans.
“Legislation has proposed that each American have an account at the Fed in which digital dollars could be deposited, as liabilities of the Federal Reserve Banks, which could be used for emergency payments.”However, Mester emphasized the need for more research and testing of potential systems for this to be considered as a viable future payment alternative. Meanwhile, Mester noted that its Board of Governors already has a tech lab, where a number of Distributed Ledger Platforms have been built and tested with the goal to better understand their potential benefits and tradeoffs.
Exploring Blockchain PotentialThe Federal Bank has other initiatives involving blockchain technology lined up. One of them includes a multi-year partnership between the Massachusetts Institute of Technology and the Federal Reserve Bank of Boston to experiment with technologies that could be used for a central bank digital currency. As reported by BeInCrypto, researches at the Federal Reserve of Philadelphia had also published a paper on the implications of an introduction of a CBDC. And another one involves their collaboration with the Bank for International Settlements, where an innovation center has been built to gather insights into crucial trends and technology that could benefit central banks.
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