The Federal Reserve is preparing to issue an official report on the CBDC to examine the advantages and disadvantages of electronic money.

In recent years, in response to the ECB's issuance of electronic money (CBDC), the Fed has been seriously considering whether to issue "central bank digital money".

Senior officials pondered the "pros and cons" of the digital system, which in theory would cause the Fed to abandon cash and let Americans use "e-wallets", which would eventually make all private banks disappear.

Wall Street reports that the Federal Reserve is preparing to issue an official report on CBDC，This report is a review of the pros and cons of CBDC.The report will be released as early as this week.The Fed will consult the public on this.

Some supporters of CBDC say this would create a "parallel" system in which the Fed could easily issue dollars without bank assistance or the Internal Revenue Service (IRS) as a medium, which would make welfare distribution or financial assistance more efficient while saving costs.

In theory, the Fed's digital dollars can be used with traditional paper money, but many details about how people will get digital dollars and how they will be integrated into the financial system are unclear. For example, Richard Levin, chairman of financial technology and regulatory practices at Nelson Mullins Riley and Scarborough law firm, saidThe Fed will need to decide whether consumers get digital dollars directly through central bank accounts or through existing commercial lending institutions。

Some supporters of CBDC say CBDC could help improve the effectiveness of monetary policy by allowing the central bank to directly adjust interest rates on CBDC accounts. This allows central banks to bypass fickle financial markets and transmit monetary policy directly to individuals.

CBDC is a double-edged sword: gradually obsolete cash

Within the Fed, the original intention of issuing CBDC was for fear that the absence of CBDC in the United States would shake the position of the dollar in the global financial system. From this point of view, the release of CBDC is tantamount to a science and technology competition.

Lyle Brainard, governor of the Federal Reserve, said:

"it is hard to imagine that the dollar dominates international settlement, but there has never been a similar attempt."

Federal Reserve Chairman Colin Powell tried to remind that "right" is more important than "fast".The dollar plays a more important role in the global financial system, which means that the United States must face more risks and fears.. Powell and his team insist that the Fed's current research is too early and needs to be studied.In addition, he points out that many Americans prefer to use cash.

He also said there were privacy issues that needed to be addressed because, in theory, the Fed's CBDC system would allow the central bank to learn about each user's use of CBDC.

Senior Fed officials have said a lot, but it will soon be the "public" 's turn to speak, as the Fed promises to consult the public during the review. Given that Fed officials are divided over the possible benefits and risks of CBDC, the Fed is unlikely to make a decision any time soon.