The Federal Reserve Bank, central banking system of the United States, is now exploring digital currencies. This step has been taken to modernize the payments sector of the U.S. The CEO and the President of the bank, Loretta Mester, has said that the research regarding digital currency is on.
On September 23, Mester had said that the Federal Reserve Bank had been exploring digital currencies even before the pandemic. It is also mentioned that the bank is building and testing the range of DLT platforms that will help understand the benefits of the currency.
Mester has also said that this initiative by the Federal Reserve Bank is under a multi-year partnership between MIT and the Boston Fed. This also includes the collaboration between the New York Branch of the bank and the Bank for International Settlements.
It has also been mentioned that even though the research has been going on, there is not any decision by the Federal Reserve Bank to adopt the currency. She added that there is a need to understand the financial stability, security, privacy, monetary policy and many other things while considering digital currency.
Mester mentioned that the COVID-19 pandemic has resulted in some major changes in patterns when it comes to the payment sector of the country.
As there have been a lot of difficulties in the world economy, the US payment system has also gone through a difficult phase. Due to this, there is a need for necessary investment to bring the payment system back on track. Not only the US, different countries across the world are researching digital currencies and are planning to launch theirs. During the COVID-19 pandemic, there has been huge crypto adoption and that is the reason why a lot of countries are moving towards it.