Fed makes little progress in central bank digital currency race

• She also continued to highlight potential risks like financial system fragmentation and consumer protection and financial stability risks.

Between the lines: Brainard occasionally deviated from her prepared remarks during her appearance at CoinDesk’s Consensus 2021 event, including a mention that it was important for Fed policymakers "to follow many central banks' progress on CBDC closely — including China."

• She also stressed that "we are at the table" as she noted, "Given the potential for CBDCs to gain prominence in cross-border payments and the reserve currency role of the dollar, it is vital for the United States to be at the table in the development of cross-border standards."

State of play: The Fed is behind other central banks in developing a digital currency, and not just China, which began testing a digital version of the renminbi with brick-and-mortar retailers last year and recently expanded to include the e-renminbi in digital wallets linked to Alibaba's Ant Group.

• Sweden's Riksbank is testing a digital e-krona, and the Bank of Japan is testing a digital yen.

What's next: Fed chair Jerome Powell recently announced that the Fed would issue a discussion paper "outlining our current thinking" on digital currencies in July.