The Digital Dollar Project Statement Regarding the Federal Reserve Board?s Central Bank Digital Currency Discussion Paper

BY Business Wire | ECONOMIC | 01/21/22 02:30 PM EST

WASHINGTON--(BUSINESS WIRE)-- The Digital Dollar Project (DDP) today issued the below statements regarding The Federal Reserve Board?s discussion paper titled Money and Payments: The U.S. Dollar in the Age of Digital Transformation, released on January 20, 2022. The paper examines the pros and cons of a potential U.S. central bank digital currency (CBDC).

?The Digital Dollar Project commends the Federal Reserve?s CBDC policy paper. As our nation takes up exploration of a U.S. Central Bank Digital Currency, we must ensure that the values that are enshrined in the dollar today ? global acceptance, stable economics, the rule of law, free enterprise, freedom of speech, and, yes, individual privacy ? are embraced in the digital future of money. We are committed to continuing our support of this journey,? said The Digital Dollar Project Executive Chairman J. Christopher Giancarlo, former Chairman of the U.S. Commodities Futures Trading Commission.

Statement by The Digital Dollar Project Executive Director Jennifer Lassiter:

?The Federal Reserve Board?s discussion paper on CBDCs is a welcome and critical addition to the ongoing exploration of a U.S. CBDC. As the report outlines, CBDCs and their underlying technologies have the potential for positive societal and economic benefits, such as supporting the dollar?s international role; promoting financial inclusion; safely meeting future needs and demands for payment services; and preventing illicit transactions.

The Fed?s initial proposal of a U.S. CBDC to be privacy-protected, intermediated, widely transferrable, and identity-verified aligns with The Digital Dollar Project?s proposed model of a ?digital dollar? as outlined in its May 2020 white paper: Exploring a U.S. CBDC. While the Fed?s discussion paper does not commit to one policy choice, it does thoughtfully outline CBDC benefits, risks, and policy considerations.

The Fed?s prioritization of public outreach through a request for public comment followed by targeted outreach and public forums is reflective of the intentional approach required to reimagine the U.S.? complex money and payment systems. The Fed?s commitment to continued participation in developing international standards acknowledges the speed at which CBDC creation and adoption is unfolding globally and the criticality of including democratic principles in those discussions.

It is encouraging to see the Fed?s attention to privacy concerns regarding a U.S. CBDC. A deeper understanding of how the Federal Reserve defines ?consumer privacy? within the context of broader U.S. Constitutional privacy protections is imperative in the evaluation of U.S. CBDC design choices. In November 2021, The Digital Dollar Project released CBDC Privacy Principles highlighting the unique opportunity for CBDCs to offer Fourth Amendment privacy protections in terms of both technology and public policy considerations. Consumer privacy is certainly a critical privacy consideration, but one of many in this evolving digital era.

The Digital Dollar Project and its participant community look forward to commenting on the Federal Reserve Board paper and continuing to convene private sector thought leaders and actors to propose and test possible CBDC models for public sector consideration.?

The DDP is open to participants from all relevant sectors, including commercial institutions, the innovation community, non-profit organizations and universities that want to lead or participate in pilots. The DDP is working in collaboration with pilot partners to explore the challenges and opportunities of a U.S. CBDC through a deliberative process, including pilots, stakeholder meetings, roundtable discussions, and open forums.

  • Join the DDP by emailing
  • Sign up for news and pilot updates from The Digital Dollar Project
  • Read and Provide Commentary on The Digital Dollar Project?s Privacy Principles
  • Download The Digital Dollar Project?s Exploring a Digital Dollar White Paper

About The Digital Dollar Project (DDP)

A non-profit organization, The Digital Dollar Project was created to encourage research and public discussion on the potential advantages and challenges of a U.S. CBDC ? or a ?digital dollar.? The DDP will identify options for a CBDC solution to help enhance monetary policy effectiveness and financial stability; provide needed scalability, security and privacy in retail, wholesale and international payments; and integrate with existing financial infrastructures, including U.S. Federal Reserve-related projects. Visit

Source: The Digital Dollar Project

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.