A governor board member of the US Federal Reserve has reportedly hinted at the possible research going to be carried out by the department, regarding a new central bank digital currency.

Lael Brainard – who has seats in numerous Fed committees – has reportedly shared her perspective, at a symposium on the future of payments at the Stanford Graduate School of Business on Feb. 5.

“The Fed conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC.” Brainard specifically claimed. 

Brainard used the insights generated from a survey the Bank for International Settlements, claimed that up until January 2020, a majority of central banks across the globe (80%) has get themselves involved in some kind of CBDC project. This figure has witnessed a 10% leap, compared to 2019’s data.

With the current crucial part played by the dollar on the global markets, Brainhard believed that the Fed have to stay “on the frontier of research and policy development regarding CBDC”.

New digital payments, currency and settlement instruments are rapidly increasing in numbers, she shared, using examples from Facebook’s Libra and China’s digital Yuan as nominal creations in the private and public sector, globally. She also emphasized the ability of CBDCs in helping a sovereign currency stay as the anchor of a country’s payment system. 

“For smaller economies, there may be material effects on monetary policy from private-sector digital currencies as well as foreign central bank digital currencies. In many respects, these effects may be the digital version of ‘dollarization,’ with the potential for a faster pace and wider scope of adoption.”