TECH: Federal Reserve study offers no answers on creating a digital dollar.

Don’t expect the US Fed­er­al Reserve to issue a dig­i­tal dol­lar any­time soon. CNBC reports that the Reserve released its long-run­ning study of a cen­tral bank cryp­tocur­ren­cy, but took no posi­tion on whether or not it should pur­sue the tech­nol­o­gy. Instead, the paper explored the ben­e­fits and poten­tial pit­falls of dig­i­tal cur­ren­cies and asked for pub­lic comment.

The Fed has warned that exist­ing cryp­tocur­ren­cies tend to be high­ly volatile, con­sume a lot of ener­gy, and often have sig­nif­i­cant trans­ac­tion lim­i­ta­tions. A cen­tral bank-backed for­mat could over­come some of those prob­lems, the Reserve said, by serv­ing as a “bridge” between pay­ment ser­vices, mak­ing finance more inclu­sive and pro­vid­ing “safe and reli­able” mon­ey. The Reserve also believed that dig­i­tal cur­ren­cy could improve cross-bor­der pay­ments and pro­tect the role of the US dol­lar on the world stage.

How­ev­er, the gov­ern­ment has also warned that offi­cial dig­i­tal mon­ey should take into account pos­si­ble changes in the finan­cial world, such as encour­ag­ing more runs on finan­cial com­pa­nies. It should also main­tain pri­va­cy, pro­tect against crimes like fraud, and be resilient.

The reserve raised the pos­si­bil­i­ty of offline capa­bil­i­ty to allow trans­ac­tions when inter­net access is unavail­able, such as dur­ing nat­ur­al disasters.

The agency stressed that its report was a “first step” in dis­cussing the pos­si­bil­i­ty of a cen­tral bank cryp­tocur­ren­cy, and that it would give the pub­lic until May 20, 2022 to offer com­ment and respond. to the questions.

For now, how­ev­er, the Reserve will remain neu­tral and will only oper­ate on a dig­i­tal cur­ren­cy if longer-term research sup­ports the con­cept. It is resist­ing the pres­sure to act quick­ly, even if oth­er coun­tries are already mov­ing forward.

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