On March 1, 2023, Nellie Liang, Under Secretary for Domestic Finance at the US Treasury Department, delivered a speech on the topic of central bank digital currencies (CBDCs) at the Atlantic Council in Washington. In her speech, Liang detailed that CBDC is one of several options for “upgrading the legacy capabilities of central bank money” and that members of the Treasury, Biden administration, and Federal Reserve “will begin meeting regularly” on the topic.
Nellie Liang of the U.S. Treasury explained
key considerations in the development of CBDC.
Nellie Liang, Under Secretary for Domestic Finance at the U.S. Treasury Department, gave aspeechto the Atlantic Council titled “Next Steps in the Future of Money and Payments.” In her speech, Liang discussed U.S. President Joe Biden’s Executive Order calling on the government to develop an approach to the digital currency sector. He also mentioned the collapse of some crypto businesses last year, the “runaway stablecoin” and the “confusion of customer and corporate assets.”
“All of these mishaps reinforce the recommendation that regulators strongly enforce existing laws to protect consumers,” Liang said. Liang’s speech focused primarily on Central Bank Digital Currencies (CBDCs) and her belief that “central banks are at the center of the global monetary system.” She further noted that the key decision factor will be whether governments create wholesale CBDCs, retail CBDCs, or both. Liang added that CBDCs have “three core characteristics.”
“First, CBDCs will be legal tender. Second, CBDCs are exchangeable one-to-one with other central bank money, i.e., reserve balances and bills. Third, CBDC will be settled almost instantaneously,” Liang said.
The senior Treasury representative said that CBDCs must address “global financial leadership,” “national security,” and “privacy,” but also “illicit finance and inclusion.” She said the U.S. CBDC working group is focused on achieving these objectives and identifying tradeoffs. Regarding inclusion, Liang noted that the U.S. has a large unbanked population and CBDCs should be evaluated on their ability to promote “inclusion and equity in the delivery of financial services.”
Liang concluded his speech by noting that members of the U.S. government plan to meet regularly to discuss CBDCs. He also emphasized that 11 countries have fully launched central bank digital currencies and many others are dedicated to the research and development of this idea.
“In the coming months, leaders from the Treasury Department, the Federal Reserve, and various White House agencies, including the Council of Economic Advisers, the National Economic Council, the National Security Council, and the Office of Science and Technology Policy, will meet regularly to begin discussing
