MNI BRIEF: Biden Administration Pushes US Exploration Of CBDC

President Joe Biden will sign an executive order Wednesday directing the Justice Department, Treasury and other agencies to study the legal and economic ramifications of creating a U.S. central bank digital currency, and that encourages the Federal Reserve to continue its research, development, and assessment efforts for a CBDC.

Biden's order sets an 180-day deadline for a series of reports on "the future of money," payment systems, the role that cryptocurrencies will play in the evolving landscape, and seeks to promote American leadership in technology and economic competitiveness. While senior administration officials on a call with reporters said no determination has been made on whether a CBDC would be in the national interest, the order encourages the Fed to continue its research, development, and assessment efforts for a digital currency, including "development of a plan for broader U.S. Government action in support of their work," a fact sheet said.

The Fed issued a discussion paper in January on a central bank digital currency, which warned about impacts on interest rate control, and stated the central bank does not intend to proceed with a CBDC without clear support from the executive branch and from Congress. The Boston Fed and MIT have been working on technological research and code base of a CBDC.