US Federal Reserve Bank considers digital coin

The US Federal Reserve Board has issued a discussion paper titled ‘Money and Payments: The U.S. Dollar in the Age of Digital Transformation ’. It has invited comments on several questions on the merits and demerits of  US digital coin. These include the benefits particularly for financial inclusion as well as the risks from a financial stability and cybersecurity perspective. The Board has not given any positions that would define the framework for the digital coin, but has indicated that it would seek legislation to guide it. It also favours a currency backed by the bank, and one that would not require users to have bank accounts. The consultation is open till May 2022.