Debevoise & Plimpton Discusses the Policy Debate over Developing a U.S. Central Bank Digital Currency

For much of the past century, consumers and commercial end users could access the Federal Reserve’s balance sheet directly in only one way—by holding physical currency or coin issued or distributed by a Federal Reserve Bank. A major drawback, however, is that Federal Reserve Bank notes and coins are bearer instruments that must be physically held and transferred in order to effect transactions. Although the United States also offers digital money in the form of deposit balances at Federal Reserve Banks, only commercial banks are directly eligible to access this money through Federal Reserve Bank master accounts.

Due to a … Read more