• Undersecretary for domestic finance at the U.S. Treasury, Nellie Liang, gave a speech to the Atlantic Council in Washington discussing central bank digital currencies (CBDCs).
• During her speech, Liang discussed President Joe Biden’s executive order which called on the government to develop an approach for the digital currency sector and highlighted key considerations that need to be addressed when developing a CBDC.
• The U.S. Treasury and White House have plans to meet regularly to discuss CBDCs and payment innovations.
U.S Treasury and White House to Hold Regular Meetings on CBDCs and Payment Innovations
On March 1, 2023, Nellie Liang, undersecretary for domestic finance at the U.S. Treasury, delivered a speech to the Atlantic Council in Washington concerning the subject of central bank digital currencies (CBDCs). She detailed that a CBDC is one of several options for “upgrading the legacy capabilities of central bank money,” and members of the Treasury, Biden administration and the Federal Reserve “will begin to meet regularly” to discuss this topic.
U.S Treasury’s Nellie Liang Discusses Key Considerations in Developing a CBDC
During her speech, Liang discussed U.S President Joe Biden’s executive order which called on the government to develop an approach for the digital currency sector. She also referenced potential risks such as crypto businesses collapsing last year, “runs on stablecoins” and “commingling of customer and firm assets” which reinforce recommendations made by regulators about protecting consumers with laws already in place.
Liang stated that an important decision is whether or not a government should create a wholesale or retail CBDC or both; these would need three core features including being legal tender, convertible one-for-one into other forms of central bank money – reserve balances or paper currency – along with clearing and settling nearly instantly. She noted that when developing a CBDC it needs address global financial leadership , national security , privacy , illicit finance as well as inclusion .
Global Financial Leadership
Liang mentioned that when considering global financial leadership there are trade-offs that need evaluating since each country has different approaches towards this issue; however if done correctly it can promote stability across different markets .
National Security & Privacy
National security was also highlighted by Liang who emphasized how essential it is for governments to ensure their citizens’ data is secure from any malicious actors trying to exploit these systems . The same applies with privacy where individuals have concerns over how their data can be used by governments ; therefore measures must be taken such as enabling users control over who is able access their information .
Inclusion & Illicit Finance
Finally Inclusion & Illicit Finance were two other points brought up by Liang during her speech who referred back again promoting equity within financial services while preventing criminals from using them illegitimately; she believes meeting these objectives will help bring societies closer together while protecting individuals from fraudsters .