The Federal Reserve has not yet decided whether to issue a digital currency and will continue to evaluate its opportunities and risks

The United States Federal Reserve highlighted research and experimentation to enhance understanding of the opportunities and risks associated with central bank digital currencies (CBDCs) in a statement on August 13. These initiatives complement a number of payment-related innovation projects currently underway within the Federal Reserve System.

“Given the important role of the dollar, it is important for the Federal Reserve to remain at the forefront of central bank digital currency research and policy development,” said Federal Reserve Governor Lael Brainard. “Like other central banks, we will continue to evaluate the opportunities and challenges of digital currencies, as well as the use cases for digital currencies as a complement to cash and other payment methods.”

In his speech today, Brainard emphasized that the Federal Reserve has not made any final decision on whether to issue its own digital currency. Brainard said, "It is important to understand how the existing provisions of the Federal Reserve Act regarding currency issuance apply to CBDCs and whether CBDCs have legal tender status. We are taking the time and effort to understand the significant impact of digital currencies and CBDCs around the world."

Technological innovations are inspiring new ways for people to think about money. Consistent with its role in promoting a safe, convenient, and efficient U.S. payments system, the Federal Reserve is conducting ongoing research and experimentation with the latest payments technologies.

The Federal Reserve's Technology Lab is expanding its experimentation with technologies related to digital currencies and other payment innovations. The Technology Lab conducts hands-on research to advance the Federal Reserve's understanding of payment technologies and to support the development of policy perspectives. The Technology Lab is a multidisciplinary team comprised of Board and Federal Reserve Bank staff with expertise in payments, economics, law, information technology, and computer science.

Separately, the Federal Reserve Bank of Boston is working with researchers at the Massachusetts Institute of Technology on a multi-year effort to build a virtual digital currency for central bank use.

This research project is intended to support the Committee’s broader efforts to assess the safety and efficiency of central bank digital currency systems.

This project is focused solely on enhancing understanding of the capabilities and limitations of relevant technologies and is not intended to serve as a prototype for a Federal Reserve-issued digital currency or to address broad policy issues related to its potential issuance.

The Fed also continues to work with other central banks and international organizations to advance its understanding of central bank digital currencies.