By 
Michelle Bowman, a Governor at the U.S. Federal Reserve, has voiced reservations about the idea of the United States entering the realm of central bank digital currency (CBDC).
During a recent event at Harvard Law School in Washington, Bowman stated that “The potential benefits of a U.S. CBDC remain unclear, and the introduction of a U.S. CBDC could pose significant risks and tradeoffs for the financial system.”
While the Federal Reserve is actively researching the concept of a digital U.S. dollar, it is likely to be the government entity responsible for its issuance. However, Federal Reserve officials, including Chairman Jerome Powell and Vice Chairman for Supervision Michael Barr, have emphasized that any such move would necessitate White House approval and congressional authorization. Notably, some Republican lawmakers have introduced legislation aimed at preventing the U.S. government from taking this step.
Bowman cited multiple arguments made in the public debate regarding CBDC issuance, including addressing issues within the payment system, promoting financial inclusion, and granting the public access to safe central bank money. Yet, she conveyed her doubts, stating, “I have yet to see a compelling argument that a U.S. CBDC could solve any of these problems more effectively or efficiently than alternatives, or with fewer downside risks for consumers and for the economy.”
Moreover, Bowman highlighted that the Federal Reserve has already introduced FedNow, a real-time payments clearing system within the U.S. banking system. Additionally, private systems supported by Wall Street banks now offer instant money transfers, potentially negating the need for a CBDC.
She also expressed concerns about private stablecoins, digital tokens linked to traditional assets like the U.S. dollar, which play a significant role in the cryptocurrency markets. Bowman pointed out that while stablecoins claim to have a one-to-one peg with the dollar, they have faced issues related to security, stability, and regulation in practice. She suggested that the Fed should explore ways to subject the issuers of these tokens to regulatory measures akin to those imposed on banks.
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