Jan 20 (Reuters) - Creating an official digital version of the U.S. dollar could give Americans more, and speedier, payment options, but it would also present financial stability risks and privacy concerns, the U.S. Federal Reserve said in a long-awaited discussion paper.
The paper released Thursday made no policy recommendations and offered no clear signal on where the Fed stands on whether to launch a central bank digital currency (CBDC), a digital form of cash in your pocket. The Fed said it would not proceed with creating one "without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing law."
The paper tiptoes around a subject that has sparked debate inside the Fed's top ranks, even as other central banks across the globe are exploring the adoption of digital currencies.
Nevertheless,it sets the stage for the central bank to collect public feedback on the potential costs and benefits of a CBDC, which could ultimately advance legislation long-term.
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