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• Brainard added that setting up such a system could take five years
US Federal Reserve Vice Chair Lael Brainard said that a central bank digital currency (CBDC) could exist alongside stablecoins and provide a measure of safety, in the digital financial ecosystem.
Brainard’s comments were a part of a written testimony submitted before appearing in front of the House Financial Services Committee’s virtual hearing, ‘On the benefits and risks of a US CBDC’, on Thursday.
“In some future circumstances, CBDC could coexist with and be complementary to stablecoins and commercial bank money by providing a safe central bank liability in the digital financial ecosystem, much like cash currently coexists with commercial bank money,” said Brainard.
Brainard added that setting up such a system could take time and compared such a project with the Fed’s still incomplete real-time payments system that has taken years to build. “It could take five years to put in place the requisite security features, the design features,” she said.
She also wrote that thoughtful regulation is necessary given the recent collapse of terraUSD (UST) and luna (LUNA).“We recognize there are risks of not acting, just as there are risks of acting,” she said.
Source - Federal Reserve
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