In deciding on whether the Federal Reserve should issue a central bank digital currency, one important issue will be "how to ensure security and balance privacy with transparency," Cleveland Fed President Loretta Mester said Tuesday in a speech at the Chicago Payments Symposium.No decision has been made yet on if it will issue a CBDC. Fed Chair Jerome Powell has said it will need backing from Congress to create a CBDC.Mester also pointed to other facets of a CBDC that need to be studied, including its implications for financial stability, global financial market functioning, and the transition of monetary policy.Meanwhile, the Fed is researching and experimenting with underlying technologies. "We are gaining insights that will not only help inform a future decision on a CBDC but also aid our current work on faster payments, interoperability between payment systems, and payment system resiliency," she said.Payment systems are also evolving and both providers and regulators will must ensure that customer accounts will be adequately protected against cybersecurity breaches, fraud, and data leakage. Quantum computing is one technology that will require rethinking customer privacy protection, she said. "The traditional way of keeping data private, by taking away names or otherwise anonymizing it, no longer works in a world rich with multiple data sources that can be cross-referenced to de-anonymize the data and reveal identities."H...
Why Russia Imposed Ban On Cryptocurrencies?
