Fed Opens Debate on CBDC, Takes No Policy Stance

The Fed was careful not to take a side in its Central Bank Digital Currency white paper Thursday, which the industry has been waiting for since May

article-image

Jerome Powell, chairman, Federal Reserve; blockworks exclusive art by Axel Rangel

share
  • The Federal Reserve released its Central Bank Digital Currency report Thursday but made no indication of a policy stance
  • A CBDC would be the safest digital asset available to the general public, the report said

The Federal Reserve avoided taking a side on a central bank digital currency in its highly anticipated white paper released Thursday. 

In the 40-page report, the Fed outlines the advantages and disadvantages of creating and implementing a CBDC, but made no policy recommendations. The report comes as other nations move forward with their own CBDC plans. 

China and Russia have both expressed interest in creating CBDCs. China has already launched wallets to test its eCNY, which it hopes to have up and running by the Winter Olympics this year. Russia revealed in December that it was moving toward developing a CBDC, partly in response to the threat of Russian banks being possibly disconnected from the global financial system. 

In June, the European Central Bank argued that central banks that chose not to establish official digital currencies were risking losing autonomy and control over their financial systems in its own report. The Bahamas became the first nation to issue an official digital currency with the Sand Dollar’s launch in 2020. 

The Fed has taken a more cautious approach. Fed chair Jerome Powell has repeatedly emphasized the need for the central bank to move carefully in any plans, stating in March that the US does not have to be first when it comes to a CBDC, but it does have an obligation to be the best. 

In the report, researchers highlight the potential benefits and risks of a digital dollar. 

“A CBDC would be the safest digital asset available to the general public, with no associated credit or liquidity risk,” the report said. 

It could also help to “level the playing field in payment innovation for private-sector firms of all sizes.” 

But a CBDC raises questions, too, researchers noted. The stability of the current financial system may be compromised and there may be unforeseen implications for the existing “financial-sector market structure.” 

The Fed will be accepting public comment until May 20, 2022. Should the central bank decide to move forward with CBDC implementation, Congressional approval would be needed. The report also noted that the central bank has no plans to move forward with a CBDC without support from Congress and the executive branch. 

“We look forward to engaging with the public, elected representatives and a broad range of stakeholders as we examine the positives and negatives of a central bank digital currency in the United States,” Fed chair Jerome Powell said in a statement. 

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

375ai will hold TGE at the end of the month, CEO Harry Dewhirst told Blockworks

article-image

Block’s subsidiary adds direct Bitcoin integration and AI-powered ordering tools for small businesses seeking streamlined transactions

by Blockworks /
article-image

The deal integrates Dinero’s staking suite into Plume’s real-world asset platform as it gains SEC transfer agent status

by Blockworks /
article-image

The state’s decision opens staking access to New Yorkers, signaling a regulatory shift toward broader crypto participation

by Blockworks /
article-image

The startup says it aims to rival Stripe and Worldpay by using stablecoins to speed merchant settlements from days to seconds

by Blockworks /
article-image

“S&P 500” for crypto comes as segment gains “established role in global markets,” S&P exec says