Fed to Issue Report on U.S. Digital Currency

The Federal Reserve is actively exploring digital payments and cryptocurrencies, with a focus on creating a fast payment system through their FedNow initiative. They are releasing a discussion paper to address the benefits and risks of Central Bank Digital Currencies (CBDC) in the U.S. context. Despite global trends, the Fed does not view digital currencies as a threat to the dollar's status as a reserve currency. However, they acknowledge challenges such as the potential bypassing of the banking system and the instability of current digital currencies. The Fed is deeply engaged in research to address these issues.

What is the Federal Reserve's current focus regarding digital payments?

What are the potential risks associated with Central Bank Digital Currencies (CBDC) according to the Fed?

In what way does the Fed's approach to digital currencies differ from other central banks?

How does Jay Powell describe the current state of digital currencies?

What implications could the introduction of digital currencies have on the banking system?