U.S. Treasury convening regular Biden administration discussions on CBDC

The U.S. Treasury, Federal Reserve and White House officials “will begin to meet regularly” to talk about a possible central bank digital currency, said Nellie Liang, undersecretary for domestic finance at Treasury, in a speech delivered to the Atlantic Council in Washington. 

The Treasury-led CBDC working group will study the issue further and complement the Fed’s ongoing research into a digital dollar. Treasury recommended the working group in one of the digital asset policy papers it released last September. 

Liang emphasized that the working group does not necessarily signal a shift in U.S. policy over a digital dollar, with the Fed still in a lead research role.

“The Fed has also emphasized that it would only issue a CBDC with the support of the executive branch and Congress, and more broadly the public,” said Liang. 

A CBDC could be either retail or wholesale, Liang said. A wholesale CBDC would be accessible to financial institutions that are already eligible for central bank accounts. A retail CBDC would be a complement to cash, and not replace it.  

“Full consideration of these issues for a possible CBDC – wholesale, retail, or both – will take some time to complete, but the Working Group plans to provide interim public updates,” Liang said.

The Fed has said it would only issue a CBDC if it had support from the executive branch, Congress and the public, though several Fed leaders have made public remarks indicating that a push for a digital dollar is not imminent. One of the Fed’s most-engaged leaders on the digital dollar issue, Lael Brainard, is now the National Economic Council director, a top White House advisory position to President Joe Biden.