CBDC Broadcast #11 - CBDC Interoperability, Benefits and Implications – A U.S. Perspective

About this Episode

With:

| Commissioner Hester M. Pierce, U.S. Securities and Exchange Commission
| Professor Patrick McCarty, Georgetown University Law Center

We are in the midst of studying and discussing the potential effects of a digital dollar, a digital liability issued by the Federal Reserve, available to everyone in the United States-in other words, a retail CBDC for the United States of America.

Theoretical benefits around the idea of a CBDC include greater efficiency and redundancy in the payments ecosystem, a field for innovation, greater financial inclusion, and the potential to lay the foundations for better cross-border transactions. But not only are those benefits still to be verified, but there are also risks as well in the form of financial instability, operational, reputational, surveillance, and money laundering risks. The devil is in the details, and CBDCs are not the exception, If a digital dollar is issued, its regulation and design will be particularly responsible for its success.

Having explored CBDC motivations and challenges from an Asia-pacific, Latin American, UK and Canadian perspective, we now turn our attention to the United States. In this session, guests Commissioner Hester M. Peirce from the U.S. Securities and Exchange Commission (SEC) and Professor Patrick McCarty, Adjunct Professor, Derivatives/ICOs and Cryptocurrencies at Georgetown University Law Center join FNA to offer an insight into CBDC deployment and its relationship with other digital forms of payment and benefits/implications of a national rollout from a U.S. perspective.

The session covered:

• The regulatory challenges and implications of issuing a digital dollar
• Whether a digital dollar poses a real risk of disintermediation of banks and financial stability and how CBDC design regulation could avoid this
• The role of the digital dollar in cross-border payments
• The advantage and impact of rolling out a digital dollar before other G7 nations
• Whether new forms of money, such as stablecoins and cryptocurrencies, compete with the digital and physical dollar
• Whether regulators and supervisors have the knowledge and skills to cope with the evolution of digital money and assets
• The regulation of stablecoins and cryptocurrencies
• The demand and readiness for a retail CBDC in the U.S