Michelle Bowman, a member of the Federal Reserve Board of Governors, said two weeks ago that the imminent introduction of the FedNow real-time payments system makes a digital dollar unnecessary. It doesn’t matter.
CBDCs, central bank digital currencies, have reached a critical mass, and sufficient large economies are challenging the greenback’s status as the world’s reserve currency (and all the power that comes with it) to reintroduce the debate to matters of national prestige.
Bowman said she “expects FedNow to address the concerns that some have raised about the need for a CBDC.” The service will “help transform the way payments are made.”
Bowman of the Federal Reserve believes FedNow makes the digital dollar unnecessary.
The “no” side of the argument is based on this, as well as concerns about privacy and competition with the private sector — traditional banks as well as FinTechs and stablecoins.
In a July 30 message, Federal Reserve Board of Governors Vice Chair Lael Brainard said the “dollar is extremely dominant in international payments,” and if you have the other major jurisdictions in the world with a digital currency, a CBDC offering, and the United States does not have one, it just doesn’t sound like a sustainable future to me.”
She said in May that the worst position for Congress to be in is for it to find itself telling the Federal Reserve in five years, “You need to catch up. China’s out there, the [European Central Bank] is out there.”
See more: Fed’s Brainard Says US Needs CBDC For International Use Cases
Maxine Waters, the chair of the House Financial Services Committee, said on July 27 that a stablecoin regulatory measure she hopes to bring before the committee in the next few weeks will “require the Federal Reserve to research and develop a central bank digital currency,” helping us remain competitive internationally.
