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Briefing
How Did We Get Here? From Observing Private Currencies to Exploring Central Bank Digital Currency
The emergence of private digital currencies has inspired discussion over the possibility of central bank-issued digital currencies. While privately issued currencies are not new, the rise of digital currencies has highlighted both concerns and opportunities for central banks.
Briefing
Inclusion by Design: Crafting a Central Bank Digital Currency to Reach All Americans
One motivation for a central bank digital currency (CBDC) is financial inclusion—bringing unbanked Americans into the payments system. To meet this goal, a CBDC would have to be designed to meet the specific needs of the diverse unbanked population.
Briefing
A Historical Perspective on Digital Currencies
This article reviews private currencies in U.S. history to shed light on the contemporary issue of digital currencies. This perspective suggests that government interventions have a critical role in creating a well-functioning money and payments system. Particularly, a central bank digital currency (CBDC) can be a useful tool to supplement regulation in addressing long-standing concerns and risks associated with private currencies.
Journal Article
Fed Eyes Central Bank Digital Currency
Digital assets have been all the rage. Millions of Americans have invested in privately issued cryptocurrencies, whose market value surpassed $3 trillion for a while late last year. Further pushing the envelope of innovation and speculation, the prices of so-called "algorithmic" cryptocurrencies such as TerraUSD have been supported by yet other cryptocurrencies in arrangements that some observers have likened to Ponzi schemes. Meanwhile, collectors have spent billions of dollars to purchase pieces of art and other items in the form of digital "non-fungible tokens" or NFTs.
Briefing
Motives Matter: Examining Potential Tension in Central Bank Digital Currency Designs
As a new central bank liability, central bank digital currency (CBDC) has the potential to address various issues within current payments and financial systems. The motivation behind a CBDC will determine how it is designed; a CBDC designed to achieve one goal, such as broader financial inclusion, may have difficulty achieving other objectives.