MNI BRIEF: Fed's Brainard - Important US Lead CBDC Standards

Federal Reserve Vice Chair Lael Brainard said in written testimony to Congress digital currency from the U.S. central bank is one strategy to assure the dollar's global use.

"More broadly, it is important for the United States to play a lead role in the development of standards governing international digital finance transactions involving CBDCs consistent with the norms of privacy, accessibility, interoperability, and security," she said in prepared remarks released before a Congressional hearing Thursday.

While emphasizing that no decision has been made whether a U.S. CBDC will be a part of that future, the top Fed official said it would be important to develop design features that could mitigate risks of disintermediating banks, "such as offering a non-interest bearing CBDC or limiting the amount of CBDC a consumer could hold or transfer."