Photo AP / Cliff Owen
Federal Reserve Gov. Lael Brainard said Thursday that the central bank has partnered with researchers at the Massachusetts Institute of Technology to create a virtual currency.
The Fed aims for a better perception of virtual currencies through this program, Brainard said at a convention sponsored through the Federal Reserve Bank of San Francisco. The financial authority will also explore the possibility of offering a US dollar figure.
However, the bank is committed to these currencies and their implications in the world.
“Given the dollar’s vital role, it is that the Fed remains on the line of studies and the progression of policies with respect to [central bank virtual currencies],” the Fed governor said.
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Brainard said in February that the Fed takes a closer look at regulations and protections for banknotes and virtual currencies. The new generation can prospectively bring “higher price and convenience at a lower cost,” he said at the time. The governor also referred to fed studies on the prospective use of virtual currencies.
However, there are considerations that the advent of a central bank virtual currency can only cause immediate bank outflows.
Brainard’s announcement Thursday brings dozens of central banks around the world to the Fed. China is moving forward with its own plans to factor a virtual currency. The European Central Bank said in 2019 that it would “continue to assess the prices and profits” of a central bank virtual currency, but stopped before securing a factor.
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