The Federal Reserve Shares Its Thinking About a US CBDC

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 22 January 2022

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo, Abra and FTX US. For more than a year, the Federal Reserve has been talking about a forthcoming paper on central bank digital currencies in the U.S. Now that the paper has finally been released, NLW walks us step by step through the Fed’s thinking and shares the initial commentary from the crypto community and Washington, D.C. Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW - Nexo is a powerful, all-in-one crypto platform where you can securely store your crypto. Invest, borrow, exchange and earn up to 17% APR on Bitcoin and 20+ other top coins. Insured for $375M. Audited in real-time by Armanino. Rated excellent on Trustpilot. Get started today at nexo.io. - Abra is proud to sponsor The Breakdown. Join 1M+ users and Conquer Crypto with Abra, a simple and secure app where you can trade 110+ cryptocurrencies, get 0% interest loans using crypto as collateral, and earn interest with up to 14% APY on stablecoins and 8.15% APY on Bitcoin. Visit Abra.com to get started. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell, research by Scott Hill and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Time” by OBOY. Image credit: Koron/Moment/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.0	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:15.0	The breakdown is sponsored by nexo.io, Abra, and FtX, and produced and distributed by CoinDesk.
0:22.6	What's going on, guys? It is Friday, January 21st, and today we are talking about the Fed's
0:28.9	long-awaited central bank digital currency paper. This is meant to give a sense of where the Fed is,
0:36.2	how they're thinking about different issues
0:37.9	regarding a CBDC, whether they're leaning towards it, whether they're leaning away from it.
0:42.7	All of these things were kind of wrapped up in expectations.
0:45.6	So we're going to talk about what they actually said, whether it met those expectations,
0:48.9	and what comes next.
0:50.7	First up, however, if you are enjoying the breakdown, please go subscribe to it. Give it five stars. Leave a review. Or if you want to dig deeper into the conversation with some other smart people, join the Breakers Discord. You can find a link in the show notes or you can go to bit.ly slash breakdown pod. Lastly, as always, a disclosure in addition to them being a sponsor,
1:14.3	I also work with FTX. So what we're going to do for the majority of this show is go through the
1:20.5	paper more or less in the order that it's written. I want you guys to have a sense, a crib notes
1:25.5	version of what the Fed is putting out there
1:27.7	into the world, and then we'll talk about a few immediate reactions.
1:31.4	Let's start with the setup, how the Fed describes what challenges exist in the current
1:36.9	money system we have.
1:38.7	First, they do note more than 7 million unbanked Americans, a little over 5% of the population. On top of that,
1:46.1	they quote 20% of Americans who have bank accounts, but rely on less than optimal products like
1:52.2	money orders, check cashing services, or payday loans. Another big area of challenge they identify is
1:58.3	cross-border payments, which they say have slow settlement,
2:01.3	high fees, and limited accessibility. They pin those problems on a number of different reasons,
	...

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