Task Force on Financial Technology
Traditional electronic payment systems are electronic representations of fiat currency and require a network of financial intermediaries who maintain accurate ledgers. Since 2008, a new digital asset class that uses cryptography and distributed ledger technology (DLT) has gained prominence and value in the global economy. These digital assets, often called cryptocurrencies, usually require no centralized intermediary to buy, sell, or exchange since the ledgers are public, mathematically verified, and stored on a distributed network of computers.
However, the rise of decentralized cryptocurrencies and private digital currencies has helped spur debate around the concept of a central bank digital currency (CBDC), which would be issued by a government’s central bank – such as the Federal Reserve System (Fed) – and would replicate some features of cryptocurrencies. A CBDC is generally considered a digital payment instrument that is a direct liability of a central bank, but since implementation is, by definition, left to each sovereign state, CBDC designs will inevitably vary.
In response to rapid innovation in digital assets across the globe, the Fed, the central banking system of the U.S., has shown greater involvement and interest over the past several years, as demonstrated by the launch of a multi-year collaboration between the Boston Fed and MIT to code and test a hypothetical CBDC. This hearing will explore CBDC’s potential design trade-offs of various technological infrastructures and examine consumer privacy implications and the
potential for increased financial inclusion.
Click here for the Committee Memorandum.
Carmelle Cadet, Founder and CEO, EMTECH
Jonathan Dharmapalan, Founder and CEO, eCurrency
Rohan Grey, Assistant Professor of Law, Willamette University
Dr. Neha Narula, Director of the Digital Currency Initiative, MIT Media Lab
Dr. Jenny Gesley, Foreign Law Specialist, Library of Congress