KEY POINTS
- Fed analysts said if the US doesn't issue its own CBDC, its role as an exchange medium could diminish
- They noted that a "widely accessible" Fed-issued digital dollar may "likely" enhance the US dollar's appeal
- There has been little support for a possible US CBDC amid concerns of financial privacy infringement
The emergence of stable foreign central bank digital currencies (CBDCs) are unlikely to have an impact on the U.S. dollar's use as a value storage mechanism, but could diminish the dollar's role as a medium of exchange, analysts with the U.S. Federal Reserve said in a recent paper.
