Federal Reserve Vice Chairman Michael Barr discussed the central bank's ongoing study of central bank digital currencies (CBDCs) and related technologies on October 27. Speaking at the Payment Economics 12th Conference, Barr mentioned that the Fed is concentrating its research on "end-to-end system architecture," with a specific focus on aspects like ledgers, tokenization, and custody models for intermediary CBDCs. Barr emphasized that the issuance of a digital dollar would require congressional authorization but acknowledged the importance of learning from both domestic and international experiments to foster responsible innovation.
While Barr's remarks were generally in line with the Fed's approach to CBDC research, they echoed Representative Tom Emmer's call for the Fed to move beyond what he termed a "cursory" study of CBDCs, a sentiment he expressed in the House of Representatives in September.
Sir Jon Cunliffe, Deputy Governor of the Bank of England (BOE), also addressed the conference, where he delivered his final speech before concluding his 10-year term on October 31. He mentioned that no final decisions have been made regarding a digital pound but noted that a consultation paper published in February indicated a growing likelihood that a digital pound would be required by the end of this decade. This paper received approximately 50,000 responses, with key concerns among respondents related to privacy, programmability, and the potential reduction of physical currency.
Cunliffe humorously remarked on the wide range of criticism regarding a digital pound, from concerns about its impact on the banking system to doubts about its necessity. He foresees that private companies may integrate digital pounds as a settlement asset into the services they offer to wallet holders, promising a forthcoming response from the Bank of England in the coming months.
In addition, Cunliffe pledged that the Bank of England would soon release a discussion paper concerning the regulation of stablecoins, aligning with Barr's assertion that regulation is vital for assets that draw upon the trust of central banks.
