The Federal Reserve on Thursday announced it is building and testing a hypothetical digital currency, equivalent of cash.
The goal of the program is to enhance the Fed’s understanding of digital currencies, said Fed Governor Lael Brainard, in a speech to a conference on innovation sponsored by the Fed’s San Francisco regional bank.
Brainard went to great pains to stress that the central bank is not poised to issue digital dollars.
A “separate policy process” involving thorny legal questions would be needed if the Fed ever wanted to use a digital currency. The central bank has not made a decision to even start such a process, Brainard said.
“We are taking the time and effort to understand the significant implications of digital currencies and central-bank-digital-currencies around the globe,” Brainard said.