https://www.federalreserve.gov/publicat ... 220120.pdf
Lots of GOP senators were interested in this paper during the Powell confirmation hearings, and it got released a few days after the hearing.
As noted above, for the purposes of this discussion paper, CBDC is defined as a digital liability of
the Federal Reserve that is widely available to the general public.19 Today, Federal Reserve notes
(i.e., physical currency) are the only type of central bank money available to the general public.
Like existing forms of commercial bank money and nonbank money, a CBDC would enable the general public to make digital payments. As a liability of the Federal Reserve, however, a CBDC would
not require mechanisms like deposit insurance to maintain public confidence, nor would a CBDC
depend on backing by an underlying asset pool to maintain its value. A CBDC would be the safest
digital asset available to the general public, with no associated credit or liquidity risk.
The Federal Reserve will continue to explore a wide range of design options for a CBDC. While no
decisions have been made on whether to pursue a CBDC, analysis to date suggests that a potential U.S. CBDC, if one were created, would best serve the needs of the United States by being
privacy-protected, intermediated, widely transferable, and identity-verified.
CBDC is Central Bank Digital Currency.
I still generally get confounded when trying to game out the widespread adoption and use of crypto. But I think the blurb helps a little bit. So basically, you are going to always have this global community of crypto people that hold crypto because either they are libretarians, want to transact outside the banking system, or do cross-border money transfers.
So, I think in terms of practical application, the concept of a fed digital currency would be more of a competition to traditional banks, as a means for individuals in this country to make digital transactions without having to use the current payment processing channels. I guess I would just assume the fed and the banks to determine the course for digital currencies in this country, and I don't see Bitcoin and other cryptos being anything different than what they are now.
But, would be interested in thoughts of people that see the blockchain being used for something beyond what it is now.
