In January of this year, the Board of Governors of the Federal Reserve System issued a research and analysis paper titled Money and Payments: The US Dollar in the Age of Digital Transformation, in which the Fed explores potential benefits and risks of a US central bank digital currency (CBDC). The Fed defines a CBDC for purposes of the paper as a “digital liability of a central bank that is widely available to the general public” and is analogous to a digital form of paper money. In line with this definition, a potential US CBDC is often referred to as the digital dollar.
