Federal Reserve Governor Lael Brainard provided a broad description of the Fed’s ongoing research and plans in the potential development of a U.S. central bank digital currency (CBDC), also described in the U.S. as a Digital Dollar. Brainard, who has for years led the discussion at the Fed on distributed ledger technology and digital currencies, noted the Fed is active in conducting research and experimentation in these areas.

In her speech to during Federal Reserve ‘Innovation Office Hours’ at the Federal Reserve Bank of San Francisco today, Brainard noted, “Given the dollar’s important role, it is essential that the Federal Reserve remain on the frontier of research and policy development regarding CBDCs. As part of this research, central banks are exploring the potential of innovative technologies to offer a digital equivalent of cash…We are continuing to assess the opportunities and challenges of, as well as the use cases for, a CBDC, as a complement to cash and other payments options.”

Brainard described ‘in-house experiments’ at the ‘Board Technology Lab’, where a multidisciplinary team of application developers from the Federal Reserve Banks of Cleveland, Dallas, and New York helps support a policy team at the Board studying the “implications of digital currencies on the payments ecosystem, monetary policy, financial stability, banking and finance, and consumer protection.”