On March 1, 2023, Nellie Liang, US Treasury Undersecretary for Internal Finance, delivered a speech to the Atlantic Council in Washington on the topic of central bank digital currencies (CBDCs). Liang detailed during her speech that a CBDC is one of several options to “upgrade the legacy capabilities of central bank money,” and members of the Treasury, the Biden administration, and the Federal Reserve “will begin to meet regularly” to discuss the topic.
Nellie Liang of the US Treasury Department discusses key considerations in developing a CBDC
US Treasury Assistant Secretary for Internal Finance Nellie Liang gave a speech in the Atlantic Council titled “Next Steps in the Future of Money and Payments.” During the speech, Liang discussed US President Joe Biden’s executive order urging the government to develop an approach to the digital currency sector. Liang also referred to the collapse of some cryptocurrency businesses last year, “it runs on stablecoins” and the “client and company asset mix.”
“All these calamities reinforce the recommendations made for regulators to vigorously enforce existing laws to protect consumers,” Liang said. His speech focused mainly on central bank digital currencies (CBDCs) and how he believes that “central banks are at the heart of the global monetary system.” He further noted that an important decision is whether the government creates a wholesale CBDC, a retail CBDC, or both. Liang added that a CBDC will have “three main characteristics.”
“First, a CBDC would be legal tender. Second, a CBDC would be one-for-one convertible into other forms of central bank money: reserve balances or paper money. Third, a CBDC would be cleared and liquidated almost instantly,” Liang said.
The senior Treasury representative said a CBDC must address “global financial leadership,” “national security” and “privacy,” but it must also address “inclusion and illicit finance.” She said the US CBDC Task Force is focused on meeting these goals and identifying trade-offs. Regarding inclusion, Liang noted that the US has a large unbanked population and that a CBDC should be evaluated to determine if it can promote “inclusion and equity in financial service delivery.”
Liang concluded his speech by mentioning that members of the US government plan to meet regularly to discuss CBDCs. He also emphasized that 11 countries have fully launched central bank digital currencies, and many other jurisdictions are dedicated to researching and developing the idea.
“In the coming months, leaders from the offices of the Treasury, the Federal Reserve and the White House, including the Council of Economic Advisers, the National Economic Council, the National Security Council and the Office of Science and Technology Policy, will begin to meet regularly to discuss a possible CBDC and other payment innovations,” Liang said in his closing remarks.
What do you think about the US government’s plans to meet regularly to discuss CBDCs and other payment innovations? Share your thoughts on this topic in the comments section below.
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