Search Results
Briefing
What Consumer Surveys Say about the Design of a U.S. CBDC for Retail Payments
Although researchers continue to discuss the possibility of a central bank digital currency (CBDC) for retail payments in the United States, the success of a CBDC will depend on consumer adoption. To understand how a CBDC could provide a good user experience, recent surveys in the United States and in other countries have asked consumers about their wants and needs for a potential CBDC. In the United States, a majority of respondents to these surveys seek dependability, convenience, and security.
Newsletter
The Structure of Federal Reserve Liabilities
Throughout the financial crisis and its aftermath from late 2008 through October 2014, the Federal Reserve used asset purchases as a potent tool of monetary policy?buying longer-term Treasury and mortgage-backed securities to provide economic stimulus beyond what traditional policy approaches could produce. Consequently, the size and composition of the Fed?s balance sheet changed significantly over this period.
Tokens vs. Accounts: Why the Distinction Still Matters
Computer science experts may say the difference is irrelevant in the digital world. But when it comes to payments, distinguishing the two still has value in the real world.
Journal Article
Blockchain and Financial Market Innovation
Blockchain technology is likely to be a key source of future financial market innovation. It allows for the creation of immutable records of transactions accessible by all participants in a network. A blockchain database is made up of a number of blocks ?chained? together through a reference in each block to the previous block. Each block records one or more transactions, which are essentially changes in the listed owner of assets. New blocks are added to the existing chain through a consensus mechanism in which members of the blockchain network confirm transactions as valid. The technology ...
Decentralized finance proposed as alternative to traditional financial services
DeFi applications allow users to directly interact with each other to borrow, lend, insure and exchange digital assets without centralized intermediaries, such as banks and custodial exchanges.
Newsletter
Payment Systems Evolution: How Does Money Move from a Buyer to Seller?
With the click of a button or swipe of a card, money can flow into and out of bank accounts without hesitation. This Page One Economics article examines what it takes for that money to move quickly and reliably to and from accounts, and how a new service developed by the Federal Reserve can contribute to US payment systems.
Working Paper
Two-sided Market, R&D and Payments System Evolution
It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a two-sided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary ...
Journal Article
Clarifying Liability for Twenty-First-Century Payment Fraud
This article examines the governance structure of retail payments in the United States, provides an overview of payment fraud, and discusses in depth the liability frameworks for fraud involving specific payment methods. It also presents a series of recommendations that describe how the public sector might work together with the private sector to reduce fraud risks by clarifying liability for fraud.
Blockchain Technology Aims to Expand Role of Digital Transactions on Internet
While the resources devoted to blockchain technology development have increased dramatically the past few years, the technology’s ultimate success depends on whether blockchain protocols can interact with the current economic landscape and how that occurs.
Discussion Paper
How the High Level of Reserves Benefits the Payment System
Since October 2008, the Federal Reserve has increased the size of its balance sheet by lending to financial intermediaries and purchasing assets on a large scale. While these actions have increased the amount of reserves in the U.S. banking system and therefore raised concerns about excessive bank lending and inflation, we can document an important and overlooked benefit of the high level of reserves: a significantly earlier settlement of payments on Fedwire, the Federal Reserve’s large-value payment system. Quicker settlement on Fedwire improves liquidity throughout the economy, reducing ...