Calls for a digital dollar have been on the rise.Gustavo Rezende Dos Santos | EyeEm | Getty Images
On Wednesday morning, the Senate Banking Committee Economic Policy Subcommittee under Senators Warren and Kennedy will hold a hearing on the challenges and opportunities of a Digital Dollar. The hearing will undoubtedly note the recent speech by Federal Reserve Governor Lael Brainard outlined potential advantages of a U.S. central bank digital currency (CBDC), including with respect to access, inclusion, and efficiency, and next steps in the Fed’s analysis. It will also note the speech the week before by Sir Jon Cunliffe, deputy governor of the Bank of England, promising a careful and thorough assessment of the need for some form of “Britcoin” to “meet the needs of modern day life.”
We agree with the thoughtful and balanced approach of these public sector leaders. That is why we have similarly called for careful exploration of a U.S. CBDC that we termed – perhaps not creatively – a “Digital Dollar.” And while as former regulators we believe in the prudence of considering what could go wrong with a CBDC, we believe now is a time to equally consider what could go right.
There are several possible formats for a digital dollar. We