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The U.S. central bank has been working on creating a digital dollar, according to a recently published transcript from Federal Reserve Board Governor Lael Brainard. On Thursday, she told participants attending âSan Franciscoâs Innovation Office Hoursâ webcast, that the Fed has been âcollaborating with researchers at the Massachusetts Institute of Technology (MIT)â toward building a CBDC codebase.
The central bank cold wars have begun, as the United States clearly wants to compete with Chinaâs upcoming central bank digital currency (CBDC). Not too long ago, the Federal Reserve Chair Jerome Powell didnât give the media too many clues about the bankâs efforts to create a digital dollar.
Powell acted as though the central bank was simply investigating the possibilities of a CBDC, but nothing more than that. Federal Reserve Board Governor Lael Brainard seems to be telling a different story.
Just recently, Fed Chair Jerome Powell told Rep. Tom Emmer (R-Minn.) that private entities should not get involved with building the digital dollar and the monetary system should be left to the central bank. âI do think this is something that the central banks have to design,â Powell stressed. âThe private sector is not involved in creating the money supply, thatâs something the central bank does.â
Brainard discussed the subject in a webcast published on August 13, which was conveniently called âAn Update on Digital Currencies.â The Board Governor explained that the coronavirus outbreak was a reminder of how far behind the country is with regard to digital currency payments.
âThe Covid-19 crisis is a dramatic reminder of the importance of a resilient and trusted payments infrastructure that is accessible to all Americans,â Brainard stressed. The Fed executive further stated:
It was notable that after a sharp reduction in spending early in the COVID-19 crisis, many households increased their spending starting on the day they received emergency relief payments.
In addition to the Fed investigating a CBDC, Congress has proposed a number of bills discussing the invocation of a digital dollar this year. All of which seem to leverage Covid-19 as an important reminder that the country needs a reliable payment system. A Digital Dollar Foundation was also created in the U.S. this year.
Despite Powellâs attempts to be more secretive, Brainard told the webcast attendees that the central bankâs Boston branch has had a âmultiyearâ relationship with the Massachusetts Institute of Technology (MIT). The Boston technology school is well known for fostering digital currency research and development, including funding Bitcoin developers.
It also seems the code has been worked on during these years and at some point, Brainard said it would be open source.
âTo enhance the Federal Reserveâs understanding of digital currencies, the Federal Reserve Bank of Boston is collaborating with researchers at the Massachusetts Institute of Technology in a multiyear effort to build and test a hypothetical digital currency oriented to central bank uses,â Brainard highlighted during the âInnovation Office Hoursâ discussion. The Board Governor added:
Digital currencies, including central bank digital currencies (CBDCs), present opportunities but also risks associated with privacy, illicit activity, and financial stability. This prospect has intensified calls for CBDCs to maintain the sovereign currency as the anchor of the nationâs payment systems.
What do you think about the Federal Reserve working on a digital dollar? Let us know in the comments section below.
The post US Federal Reserve Reveals Building a Digital Dollar Codebase With MIT appeared first on Bitcoin News.
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