Federal Reserve Digital-Dollar Accounts
In the course of crafting the CARES Act,1 Democrats in the House and Senate sought so far unsuccessfully to launch the U.S. quickly into providing a U.S. central-bank digital currency (CBDC) in which banks act as agents for the Fed, gathering deposits and then passing them on to the central bank. Although the initial impetus for including this in the COVID packages was as a way to speed
federal payments to households and small businesses, the Senate version in fact brings the Federal Reserve System fully into the deposit-taking fabric of U.S. financial intermediation, with legislators planning to pursue the measure both in connection with the U.S. COVID response and on its own. The bill does not address whether the Fed would also make loans, how banks would do so without these deposits, the future of U.S. finance without bank financial intermediation, or implications for monetary policy and macroeconomic growth.

CBDC.pdf