Several US Federal banks are collectively exploring potential advantages of central bank digital currencies, president of the Cleveland Federal Reserve Bank Loretta Mester said on Wednesday.
According to a report, several Reserve Banks, including Cleveland Fed software developers, have been researching issues raised by CBDC for a long time.
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.
Mester added the Federal Reserve Bank of Boston is also engaged in a multiyear effort, working with the Massachusetts Institute of Technology, to experiment with technologies that could be used for a central bank digital currency.
"The Federal Reserve Bank of New York has established an innovation center, in partnership with the Bank for International Settlements, to identify and develop in-depth insights into critical trends and financial technology of relevance to central banks," she added.
Cleveland Fed's Loretta Mester says experimentation like this is an "important ingredient in assessing the benefits and costs of a central bank digital currency."
Notwithstanding, the initiative does not signal any decision by the Federal Reserve to adopt such an asset, she pointed out.
Earlier in August 2020, member of the US Federal Reserve's Board of Governors Lael Brainard officially confirmed that the Fed is testing "a hypothetical digital dollar" for research purposes.
However, the regulator has not yet committed to issuance that would require a formal policy process involving the government and other stakeholders.
Access more than 50 of the world's financial markets directly from your EXANTE account – including NASDAQ, London Stock Exchange and Tokyo Stock Exchange.