Journal Article

Should the United States Issue a Central Bank Digital Currency? Lessons from Abroad

Abstract: If the web 3.0 requires a public ledger–based payments platform, central bank digital currency (CBDC) is unlikely to provide the digital currency needed to fuel the smart contracts of tomorrow. This payments dilemma can be solved by a hybrid digital currency that includes a new type of bank deposit as well as regulated private stablecoins, both of which clear and settle on a next-generation public ledger created and managed as a joint venture between banks and private stablecoin issuers. With this payments platform under Federal Reserve oversight, there would be no need for the Federal Reserve to issue CBDC.

Keywords: central bank digital currency; private stablecoins; web 3.0; smart contracts;

JEL Classification: E42; E58;

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Bibliographic Information

Provider: Federal Reserve Bank of Atlanta

Part of Series: Policy Hub

Publication Date: 2022-06-22

Volume: 2022

Issue: 8

Order Number: 2022-08