US treasury official confirms ongoing central bank digital currency study

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The U.S. Treasury Department is actively considering the benefits of a central bank digital currency (CBDC), according to comments from a senior official at the department this week.

Deputy Treasury Secretary Justin Muzinich made the remarks in a presentation to the Atlantic Council in a digital seminar session, in which he suggested a CBDC was already under active review.

“It’s something we’re studying … [T]his is really a decision which sits as much with the Fed as it does with the Treasury.”

He said there were a number of benefits to blockchain technology, and that it was important for governments to embrace new innovations to help progress.

“There are clearly efficiency benefits and cost benefits to using a distributed ledger. And I also think, more broadly, it’s important for government to embrace innovation and not be scared by it.”

Munzinich suggested it was important for the United States and Europe to work together in establishing regulation for the sector.

“Cryptocurrencies are a fascinating topic, because they have implications not only for private business but also for a number of activities.”

However, he said it was important to ensure the usual laws around digital currency payments apply, particularly concerning anti-money laundering.

“Treasury has made it clear that the obligation to comply with U.S. laws is the same, regardless of whether a transaction is denominated in traditional fiat currency or digital currency. Existing laws apply to digital assets in no uncertain terms.”

Even still, Muzinich said regulation is required to ensure wider financial stability from any central bank digital currency rollout.

“This could alter money supply or cause financial disruption when such a decision is being made by a private governing association, or by a majority of coin holders. What if foreign actors had acquired a majority of the coins? In any case, would important decisions about our economic system have been taken out at the hands of governments accountable to the people?”

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch Rep. Darren Soto’s talk at CoinGeek Live 2020 Day 2.