U.S. Treasury Eyes CBDC Design Issues to Support National Interest

• The United States Treasury is considering the design of a central bank digital currency (CBDC).
• Under Secretary for Domestic Finance Nellie Liang discussed technical and policy issues that would need to be addressed.
• Liang noted that an rCBDC could enhance financial inclusion, but determining the range of intermediaries is a major policy question.

United States Treasury Examines Potential Digital Dollar

The United States Treasury Department is currently exploring the potential for a central bank digital currency (CBDC) in the country. On March 1, Under Secretary for Domestic Finance Nellie Liang presented some of the design decisions and technical issues being looked at by the Treasury-led CBDC Working Group.

Wholesale And Retail CBDCs

Liang focused on wholesale and retail CBDCs (wCBDCs and rCBDCs), noting that wCBDCs raised more technical questions than access issues with rCBDCs. She stressed that institutions not eligible for central bank accounts could be granted access to a wCBDC to facilitate tokenized interbank settlements or securities transactions, as well as support stablecoins.

Intermediated Retail CBDC Is Preferred

Liang reiterated the Federal Reserve Board’s position that an intermediated rCBDC would serve national interests better than other designs. However, she noted that one major policy question was determining the range of intermediaries who could have access to such a CBDC.

Potential To Enhance Financial Inclusion

Liang highlighted how an rCDBC could help increase financial inclusion in America—which currently has one of largest unbanked populations among G7 countries—by granting access to those previously excluded from banking services.

Future Of US Digital Dollar Still Unclear

As it stands, there are still many questions which must be answered regarding what form a US digital dollar might take if/when it is introduced in future years. The US Treasury will continue to look at various design decisions as they work towards determining what shape this project may take moving forward.