New York Fed chief: CBDCs pose challenges for central banks

The potential launch of national digital currencies (CBDCs) presents a challenge to central banks. This view was voiced by New York Fed President John Williams, according to Reuters.

The official warned of serious questions for the existing regulatory framework. He says that before issuing a CBDC it is necessary to determine how the digital form of the national currency will operate alongside cash.

In May, Federal Reserve Board member Fed Lael Brainard noted that it is vital for the United States to participate in setting CBDC standards.

In April, Federal Reserve Chair Jerome Powell stated the possibility of issuing a national digital currency. He emphasised that it is important to do this correctly, rather than compete with other countries.

Earlier in the summer of 2021, the Fed will publish a discussion paper, which will complement the earlier research on the advisability of creating CBDCs.

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