Developing a U.S. Central Bank Digital Currency: Summary of the Policy Debate

17 February 2022
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As of early February, around 100 of the world’s 195 countries have been exploring a CBDC at various stages. The Federal Reserve Board has been investigating a U.S. CBDC for years, though development is still exploratory, with no immediate plans for a pilot program. But outcomes of the current debates around design choices could have major implications for the U.S. financial system.

We summarize key features of the U.S. CBDC policy debate and the current state-of-progress, focusing on a recently published FRB Discussion Paper. We also review the factors that may impact the potential design of a U.S. CBDC and preview upcoming developments. Issues discussed include token vs. account-based systems, monetary policy, the role of intermediaries, use cases of a CBDC and criticism of the existing payment system.