Under Secretary for Domestic Finance, Nellie Liang, has recently shared some pointers on issues the CBDC Working Group is exploring.
As around 114 nations in the world continue to explore a CBDC already, the Treasury-led CBDC Working Group in the US keeps at developing and researching the CBDC. As of the most recent update, the United States Treasury Department is considering design decisions yet regarding the American central bank digital currency.
As of March 1, 2023, the Under Secretary for Domestic Finance, Nellie Liang, has given some pointers on the many technical and policy-related issues the Treasury-led CBDC Working Group is currently taking into consideration in designing the CBDC. According to Liang, looking at both the retail (rCBDC) and wholesale (wCBDC) use cases for the CBDC, the group has found that while the rCBDC raises some questions about access, the wCBDC brings about more technical issues yet to be addressed.
Liang further mentioned that the institutions that do not qualify for central bank accounts yet could be allowed to avail a wCBDC instead. The hypothetical wCBDC can also be used for interbank settlements, efficient cross-border transactions, securities trades, and it might even be able to support stablecoins.
“A wholesale CBDC might also be used as a backing asset for stablecoins, which could make it easier to transfer value among stablecoins, in addition to supporting greater interoperability and choice.”, as per Liang’s statement.
Meanwhile, the rCBDC aims to bring about a competitive and innovative, efficient payments system that magnifies financial inclusion, and helps “ preserve the singleness of the currency.” As Liang further states, the extent to which a rCBDC in the US would achieve these objectives would depend on factors like upcoming design decisions, the selected range of intermediaries to act as service providers within the CBDC network, and their requirements.
It’s to be noted that the Treasury remains firm on not issuing a central bank digital currency without congressional support, as the standard disclaimer has always suggested.