Federal Reserve Bank of Cleveland is exploring the possibility of creating a digital dollar. According to the institution’s President Loretta Mester, the idea of establishing a central bank digital currencies (CBDC) has been in the officing before the coronavirus pandemic.
A statement by the bank indicates that no solid decision has materialized. However, Mester noted that the Board of Governors has been conducting research on the benefits and risks of a digital dollar. According to Mester:
“A range of potential risks and policy issues surrounding central bank digital currency need to be better understood, and the costs and benefits evaluated,”
She made the revelation during a keynote speech at the Chicago Payments Symposium.
Mester stated that there are ongoing initiatives like a multi-year partnership between the Massachusetts Institute of Technology (MIT) and the Boston Fed. Additionally, there is an existing collaboration between the New York Fed Branch and the Bank for International Settlements.