FRB Governor Lael Brainard Outlines Policy Considerations On CBDCs

Federal Reserve Board ("FRB") Governor Lael Brainard described technological and market developments driving the FRB's deliberations on central bank digital currencies. In a speech before the Consensus by CoinDesk 2021 Conference, she outlined policy factors that the FRB is considering with respect to its increased public engagement on central bank digital currencies ("CBDCs"). Ms. Brainard stated that the FRB intends to publish in the summer of 2021 a discussion paper seeking public comment on questions relating to "payments, financial inclusion, data privacy and information security."

Ms. Brainard highlighted these developments concerning CBDCs: (i) the increasing prevalence of digital private money; (ii) the shift to digital payment methods; (iii) foreign countries' development and use of CBDCs in cross-border payments; and (iv) the importance of efficiency and affordable payments with respect to underbanked communities.