And yet another official weighing in on the e-dollar discussion, this time the Secretary of the Treasury, who has heretofore been relatively silent on the topic (wisely so since it is a somewhat vexing subject), and when discussing the cryptocurrency space in general has been largely skeptical (non-permissioned). Now that there has been an EO on the topic, which we have discussed on these pages as well, and a recent piece of legislation has been proposed that involves Treasury, we might expect a bit more opinion from the top official at the agency that manages currency in its current form. We have already posited that the eventual e-dollar will be a retail-only proposition at first, and likely 2+ years in the making.
‘“I can’t tell you yet what conclusions we will reach, but we must be clear that issuing a CBDC would likely present a major design and engineering challenge that would require years of development, not months,” Ms. Yellen, a former Fed chairwoman, said.…
A digital dollar could help Americans more easily send and receive money, she said, but more near-term changes could also make a difference…
She pointed to the coming creation of FedNow, a system that will allow bill payments, paychecks and other common consumer or business transfers to be available instantly and round-the-clock. FedNow, which is scheduled to be rolled out in 2023, is a change from the current system that is closed on weekends and can require days to settle a transaction.’
So really nothing new here, just a rehash of many things already stated and the lingering question of: ‘What’s next and when?’ This eventuality may have received a boost from the EO in terms of congressional focus, but the real meat remains the results of ongoing testing by the Boston Fed and MIT (not the various studies in the EO, which are already underway as part of the Fed’s efforts, although policy-related questions and legislation are obviously going to guide the e-dollar implementation), as well as whether or not some legislative compromise will eventually be agreed upon. Much more to come.
‘During her speech, Ms. Yellen reiterated many of the Biden administration’s broader goals for regulating digital assets and cryptocurrencies. She said that policy makers should approach the industry with a tech-neutral approach, crafting new policies based on how to best protect against risk, rather than necessarily targeting new forms of technology. “Wherever possible, regulations should be tech neutral. For example, consumers, investors and businesses should be protected from fraud and misleading statements regardless of whether assets are stored on a balance sheet or they’re stored on a distributed ledger,” she said…
Many of the studies commissioned by the executive order on cryptocurrencies will take months, and meanwhile the Biden administration is pushing Congress to pass legislation more closely regulating stablecoins, a type of digital currency whose value is often pegged to the dollar.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
