Federal Reserve Shares Update On Central Bank Digital Currencies

While participating in the Federal Reserve Bank of San Francisco's innovation office hours on August 13, Federal Reserve Governor Lael Brainard reported on the Federal Reserve's ongoing research and experimentation related to distributed ledger technologies (DLT) and the potential use for digital currencies, including central bank digital currencies (CBDCs).¹ The report comes at a time when CBDCs have received increased attention from central banks across the world,² which see the potential of CBDCs to modernize and develop more resilient payments infrastructure,³ as well as provide new tools for monetary policy transmission. As Governor Brainard explained, the COVID-19 pandemic has underscored the importance of immediate and trusted access to funds for the many households and businesses that face cash-flow constraints.