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Fed governor says central bank will partner with MIT on possible digital currency

Fed governor says central bank will partner with MIT on possible digital currency
AP Photo/Cliff Owen



The Federal Reserve is partnering with MIT researchers to build and test a digital currency, central bank governor Lael Brainard said Thursday.




The Fed hopes to gain a better understanding of digital currencies, their uses, and the potential implementation of a central bank digital currency, Brainard said at a conference sponsored by the San Francisco Fed.




However, the study involves a "hypothetical" currency, Brainard said, adding that a "significant policy process" is needed for the Fed to issue its own digital coin.




The study comes after numerous indications that the Fed was looking into such technology. Other central banks are making similar moves, and China's own central bank is moving forward with the issuance of its own digital coin.




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Federal Reserve Governor Lael Brainard said Thursday the central bank is partnering with Massachusetts Institute of Technology researchers to build and test a digital currency.
The Fed aims to gain a better understanding of digital currencies through the program, Brainard said during a conference sponsored by the Federal Reserve Bank of San Francisco. The monetary authority will also explore the potential of offering a digital equivalent of the US dollar.
The program marks a major step forward for the Fed's interest in digital currencies. Brainard stressed that the Fed isn't in a position to issue digital cash yet, as "a significant policy process" is needed to even consider issuing a central bank digital currency. The research will involve a "hypothetical" coin oriented to central bank uses, she added.
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