The US Federal Reserve (FED) announced that it is taking the “first step of discussions” about issuing its own digital currency after the agency released a report showing the potential benefits, including helping to maintain the dominance of the USD.
The move comes as more and more countries are working on a central bank-issued and backed virtual currency.
According to a report by the US Federal Reserve, a central bank digital currency could help “maintain the dominance of the USD”, in the context that the use of the US dollar globally could be decline and many other countries also plan to launch their own digital currency.
In addition, this currency also provides convenience and safety for households and businesses when choosing a digital payment method, and can enable faster cross-border payments and low fees than.
However, the Fed is also concerned about financial stability as it may cause deposits at commercial banks to decrease. The issue of protecting privacy as well as preventing illegal financial behavior are also issues to be addressed.
The Fed added that it does not intend to continue issuing digital currencies without support from the executive branch and from Congress. The Fed is seeking public comment on the report through May 20.
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