US Treasury and White House to Hold Regular Meetings on CBDCs and Payment Innovations – Nellie Liang, the undersecretary for domestic finance at the U.S. Treasury, gave a speech at the Atlantic Council titled “Next Steps in the Future of Money and Payments.” During the speech, Liang discussed U.S. President Joe Biden’s executive order, which called on the government to develop an approach for the digital currency sector.
Liang also referenced the collapse of some crypto businesses last year, “runs on stablecoins,” and the “commingling of customer and firm assets.” “All of these calamities reinforce the recommendations made for regulators to vigorously enforce existing laws to protect consumers,” Liang said. Her speech primarily focused on central bank digital currencies (CBDCs) and how she believes “central banks are at the heart of the global monetary system.”
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She further noted that an important decision is whether the government creates a wholesale CBDC, retail CBDC, or both. Liang added that a CBDC will have “three core features.” “First, a CBDC would be legal tender. Second, a CBDC would be convertible one-for-one into other forms of central bank money — reserve balances or paper currency. Third, a CBDC would clear and settle nearly instantly,” Liang said.
According to the senior Treasury representative, a CBDC must cover “global financial leadership,” “national security,” and “privacy,” but it must also address “illicit financing and inclusion.” She stated that the US CBDC Working Group is focused on achieving these goals and finding trade-offs. In terms of inclusion, Liang stated that the United States has a sizable unbanked population and that a CBDC should be evaluated based on its ability to promote “inclusion and equality in the delivery of financial services.”
Liang concluded her statement by stating that representatives of the US government intend to meet on a regular basis to discuss CBDCs. She also noted that 11 countries have completely launched central bank digital currencies, and many more are investigating and developing the concept.
“In the coming months, leaders from Treasury, the Federal Reserve, and White House offices, including the Council of Economic Advisors, National Economic Council, National Security Council, and Office of Science and Technology Policy, will begin meeting regularly to discuss a possible CBDC and other payments innovations,” Liang said in her closing remarks.