Lael Brainard on CBDC: Fed digital dollar could eventually 'coexist' with stablecoins

Federal Reserve Governor Lael Brainard believes a U.S. central bank digital currency could eventually "coexist with and be complementary to stablecoins and commercial bank money by providing a safe central bank liability in the digital financial ecosystem, much like cash currently coexists with commercial bank money," she told the House Financial Services Committee on Thursday, according to her prepared testimony. Note a CBDC is a digital form of a fiat currency issued and backed by a central bank, making it a digital liability of a central bank. Brainard highlighted that a digital currency could be “one potential way to ensure that people around the world who use the dollar can continue to rely on the strength and safety of the U.S. currency to transact and conduct business in the digital financial system,” adding that a CBDC could help maintain the U.S. dollar's global reserve status. Her remarks come as Fed