US central banker urges digital dollar development

FOMC member Robert Kaplan believes the Fed should prioritize creating a digital dollar.

President of the Dallas Federal Reserve Robert Kaplan believes the US central bank should begin work on a digital currency immediately, a clear indicator that some policymakers view this as an urgent matter.

"It is critical that the Fed focuses on developing a digital currency in the coming months and years."

The central banker's remarks were part of a broader discussion on the economy and fiscal policy.

Kaplan is a member of this year's Federal Open Market Committee, the organization tasked with setting monetary policy.

Last month, Fed Chairman Jerome Powell said that 80% of central banks around the world are exploring the potential utility of a CBDC. While the Fed has given no indication of whether it will pursue a digital dollar, it has deployed economists to explore the subject in greater detail.

On Monday, the Fed released a literature review of central bank digital currencies, or CBDCs, to explore the impact of a digital dollar on commercial banking and monetary policy.

The review concluded by recommending additional research be devoted to exploring the "Intrinsic" value drivers of a government digital currency.

Back in August, the central bank released a full-length research report comparing a digital dollar with other payment methods.

Although the idea of a CBDC is scoffed at by proponents of truly decentralized digital currencies like Bitcoin, the digital dollar is believed by some to be the natural progression of a cashless society.