SPOTLIGHT ON CBDC
Following Chairman Powell’s announcement that CBDC analysis will advance and FRB Gov. Brainard’s speech late last month advancing CBDC’s inclusion and stability benefits, Congress is stepping in to make the critical decision – if CBDC is legal – and a host of others that will dictate the course of a new U.S. digital currency. Vice Chair Quarles told Congress the day after Gov. Brainard’s speech that he believes that express statutory authority is needed for even a CBDC pilot (see Client Report REFORM206). Chair Powell differs, saying that, while he would prefer new law, it is not required for CBDC as he likes it – i.e., something based on banks without “FedAccounts” (see FSM Report CBDC). Even so, FedAccounts will be front and center in the Senate, where the hearing will be held by the Economic Policy Subcommittee chaired by Sen. Warren (D-MA), likely to be sympathetic to an early version of FedAccounts from her own political organization.

Al060721.pdf