There are currently no compelling arguments in favour of a digital dollar, and alternatives may address financial problems, said Michelle Bowman, a member of the Fed Board.
The official noted that expanding access to financial services and reducing frictions within the payments system may be characteristic not only for CBDC.
“Alternative options may perform these tasks more efficiently or with fewer risks for consumers and the economy,” she explained.
In July the Fed announced the launch of its own payments system, FedNow Service.
“FedNow and a comparable private-sector service are designed to speed up transfers and increase the convenience of payments, allowing consumers to receive funds instantly with access on the same day, and small businesses to manage cash flows more efficiently without processing delays. Future innovations may rely on these solutions,” Bowman explained.
The Fed official emphasised the importance of continuing research into CBDCs in light of such initiatives in other countries.
Bowman noted the risks of stablecoins for the U.S. banking system and consumers.
In March 2023, Republican Tom Emmer stated that a digital dollar could facilitate ‘financial control’ over citizens.
In September, the legislator became a co-author of a ban on the Fed distributing CBDC among individuals.
In January 2022, the Fed released a report detailing its study of a national digital currency. The regulator noted that the emergence of a new form would help the U.S. dollar maintain its status as the world’s reserve currency.
In September of the same year, Federal Reserve Chair Jerome Powell said there was no decision yet on launching a CBDC.