Financial technology experts agree that some form of digital payment system by the U.S. central bank is inevitable, although opinions diverge on the form it should take.
Rapid progress on a central digital currency elsewhere could threaten U.S. hegemony over global finance, and the current payment system is leaving some Americans behind financially, fintech advocates argue. China and Singapore are experimenting with digital currencies and may soon be joined by Russia, Japan and Sweden. In addition, private companies, including Facebook Inc., have proposed their own digital currencies that may challenge traditional payment networks.
In the U.S., a central bank digital currency, or CBDC, issued by the Federal Reserve, would be in the form of instantaneously transferable electronic dollars, unlike the digital dollars in bank accounts today, which require trusted parties to agree that the funds are available before a transfer can take place.
