BOSTON—Research on a central bank digital currency is still ongoing as the central bank continues to weigh the implications of digital bank notes for the U.S., according to Boston Federal Reserve Bank President Eric Rosengren.
"It is important to highlight that this is exploratory work, and any decision to move forward with such a currency would depend on a variety of factors beyond the technological feasibility and implementation," said Rosengren during a virtual event organized by Harvard Law School, according to Reuters.
Rosengren added that while a CBDC could improve financial inclusion, reduce costs of cross-border transactions, and provide more flexibility for implementing monetary policy, there are drawbacks as well.
One of which, he said, is potentially upending financial stability.
Teamed With MIT
The Boston Fed teamed up with the Massachusetts Institute of Technology in August 2020 for a multi-year collaboration to explore digital currencies with the Digital Currency Initiative.
The research project will explore the use of new and existing technologies to build and test a hypothetical digital currency platform. The research results will be published and the code would be licensed as open-source software so that anyone can experiment with it, Reuters noted.