Federal Reserve Board Releases Discussion Paper that Examines Pros and Cons of a Potential U.S. Central Bank Digital Currency (CBDC)

  • Source: Federalreserve.gov

Treliant Takeaway:

U.S. and non-U.S. financial authorities are increasing attention and focus on development and implementation of central bank digital currencies, as an alternative to current stable coins and cryptocurrencies. As of February 2022, nine countries have fully launched a CBDC, with 87 countries exploring a CBDC, including China, the EU, Japan and the UK. Treliant’s team of compliance professionals has deep experience in design, implementation, and independent assessment of BSA/AML and OFAC regulatory programs for cryptocurrency and payments companies and can assist in addressing establishment of risk-based controls to meet requirements within the evolving global CBDC payments ecosystem.

Report Highlights:

On January 20, 2020, the Federal Reserve Bank Board of Governors released a discussion paper seeking public comment on creation of a U.S. Central Bank Digital Currency (CBDC).  The paper, entitled “Money and Payments: The U.S. Dollar in the Age of Digital Transformation” invites public comment on efficient and safe use of a CBDC within the U.S. domestic payments system including a CBDC’s benefits, risks and policy considerations as well as the design of a CBDC.  A CBDC would be a liability of the Federal Reserve Bank. If adopted, a CBDC would be required to protect consumer privacy, have safeguards against hacking and money laundering activity, and be a widely accessible and seamless payment method between parties.  Prior to issuance of governing law, the FRBBOG is soliciting comments for a period of 120 days from the date of report publication, or May 20, 2022, using the form at https:// www.federalreserve.gov/apps/forms/cbdc.

Implementation of a CBDC for U.S. domestic as well as cross-border payments is a current focus are a for central bankers and Treliant will continue to monitor and provide updates on any new developments.


Efren Marquez Alba

Efren Marquez Alba is an Engagement Director with Treliant. His financial crime experience includes Anti-Money Laundering/Counter-Terrorist Financing (AML/CFT), sanctions, anti-bribery and -corruption, and fraud. With Treliant, Efren has led independent assessments of compliance programs for adherence to the Bank Secrecy Act and Anti-Money Laundering rules (BSA/AML) and to the Office…