For quite some time, the US Federal Reserve has been investigating the consequences of a digital dollar or central bank digital currency (CBDC) issuance within the country. Still, they have not been the only ones promoting the study-it seems that several regional federal banks have also contributed to their digital dollar research efforts.

How are regional Federal banks furthering research?

In a virtual payments symposium organized by Cleveland’s Federal Reserve Bank, President Loretta Mester of the Cleveland Reserve Bank announced regional federal banks’ cooperation to move CBDC research forward. She said that “staff members from several Reserve Banks, including Cleveland Fed software developers, are contributing to the effort.”

Only the involvement of the Federal Reserve Bank of Boston in digital currency research and development was made available to the public.

The regional Federal Bank has been working with several distributed ledger networks that could theoretically be used based on the issuance of digital currency by the central bank in the US. It was revealed that they have partnered to do so with the Massachusetts Institute of Technology. Finally, the New York Federal Reserve Bank and the Bank for Foreign Settlements have set up an innovation center to recognize developments in financial technology applied to central banks to develop their digital services.

CBDC critical to maintaining global reserve currency status

The dollar and CBDC growth were debated at a US Senate hearing on July 22. Cryptocurrency adoption was referred to during the Senate hearing as a tactic for the US government to retain economic dominance via the US dollar.

Senator Tom Cotton said the digital dollar had to be “better than Bitcoin”.

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