Central Bank Digital Currencies

The recent proliferation of private digital currencies or cryptocurrencies unsupported by any government authority, such as Bitcoin, has led to questions of whether the Federal Reserve (Fed) should create a central bank digital currency (CBDC)—a “digital dollar” that would share some of the features of these private digital currencies.

Although no major central bank has issued a CBDC to date, this In Focus describes how foreign central banks, the U.S. Treasury, and the Fed are approaching the issue. It also examines policy issues raised by a CBDC.