Federal Reserve Bank of Boston's Bench says the U.S. 'better be ready' for a future digital currency issuance

The Federal Reserve — the U.S. central bank — has no immediate plans to launch a digital currency. But that doesn't mean it shouldn't be ready when that day comes, according to Robert Bench, assistant vice president in the secure payments group at the Federal Reserve Bank of Boston.

During a recent webinar hosted by The Block, when asked about the U.S.'s take on central bank digital currencies (CBDC), Bench said that work is being done on the technology front that could further the mission of the Federal Reserve system.

“Like Canada, we have no plans to issue one. But we better be ready when one of those events emerges that we have seen in the world that could require us to take action and furthermore our division in the Federal Reserve Bank of Boston is exclusively a technology division. We are not policymakers,” Bench said, who spoke for himself and not the Fed during the webinar.

Additionally, Bench cited examples of various economies to make a point about use cases and how they are dependent upon central banks.

Sweden for instance, he said, faced a challenge wherein the use of cash slowly dwindled and was eventually replaced by a cashless model. Another example he quoted in the webinar was the Eastern Caribbean Central Bank faces a $100 fee when trying to move money because of the numerous islands that exist in the Caribbean.

“So on behalf of the Reserve side we are trying to look at the future to understand what use cases it could merge, it could lead the executive and legislative branches to have this action occur and to prepare for them to effectively communicate to the policymakers what the tradeoffs are,” Bench said, going on to note:

“That’s the key question for our division, to deeply understand the technology and clearly detail the tradeoffs of every policy decision that could be made.”