Here’s why the Fed isn’t very optimistic about a U.S dollar CBDC despite benefits

ambcrypto.com:

After being in the pipeline for quite some time, the U.S Federal Reserve’s white paper on the development of central bank digital currency (CBDC) was finally released on Thursday.

The Fed has stated in the paper that while the currency could allow citizens to gain access to easier and more speedy transactions, it could also cause issues related to privacy and financial stability.

Moreover, a clear indication of when or if the Digital Dollar will be created was not given by the central bank, which stated that it would first seek “clear support” from both the executive branch and Congress before going ahead with any plans, “ideally in the form of a specific authorizing law.”

The white paper further noted that even as the digital currency could “complement existing means of payment,” it would not be ideal for the Fed to issue it directly to customers. Rather, integrating it into the currency private banking system would be a more preferable route. These intermediaries could include both commercial banks and other non-bank payment entities. It added,

“The Federal Reserve’s initial analysis suggests that a potential U.S CBDC, if one were created, would best serve the needs of the United States by being privacy-protected, intermediated, widely transferable and identity-verified.”

Moreover, ensuring cybersecurity will also be one of the central considerations of the bank in the development process, as it is imperative to maintain the government’s “ability to combat illicit finance.”

“Any CBDC would need to strike an appropriate balance between safeguarding consumer privacy rights and affording the transparency necessary to deter criminal activity.”

In addition to this, the Fed also argued that the CBDC could have positive