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Illustration: Eniola Odetunde/Axios

Government leaders and central bankers are spending more time studying digital currencies, but don't look any closer to launching one than they were 6 months or a year ago.

Why it matters: Facebook, by contrast, appears to have a prime-time ready product — its Libra digital currency — and shows every intention of pushing forward, despite the recent abandonment by a quarter of the members of the currency's governing body.

  • The status quo is not an option," Libra co-creator David Marcus said Wednesday at the IMF's fall meeting. "Whether it’s Libra or something else, the world is going to change in a profound way,"

Background: It's been a decade since Bitcoin emerged, threatening to replace traditional money with digital tokens that performed the most important functions of cash but did so outside the control of central banks and other governmental authorities.

  • Ten years later, the adoption of Bitcoin and cryptocurrencies has been inhibited by extreme price volatility and lack of transparency.
  • There is a race underway as private companies and sovereign governments push to develop the infrastructure and the money for the coming cashless society.

The big picture: The Fed and central banks around the world are responsible for overseeing and stabilizing the world’s money supply, but most are at risk of being left behind in this new phase.

  • 1.7 billion people have no access to digital payments, cross-border transactions carry an average transaction cost of 7%, and even sending money within a country is cost-prohibitive for people without bank accounts, Libra's Marcus says.
  • "The poorer you are, the more you’re paying for financial services."

What's happening: While a future without cash may seem distant in the U.S. — where more people write checks than use digital payments and there is a rising demand for dollars — the rest of the world is going there.

  • Countries like Kenya and India are already operating digital currency networks, and the People's Bank of China says it will release a digital currency this year.
  • Estimates show Chinese payment platforms Alipay and WeChat Pay handled $37 trillion in mobile payments last year, Fed governor Lael Brainard said Wednesday at a symposium on digital currencies held by the Peterson Institute for International Economics.

Yet the Fed is being "exceptionally cautious" in its possible development of a U.S. digital currency, Brainard, the Fed's leading financial authority — and a former undersecretary at the Treasury Department — told Axios during Wednesday's event.

  • A digital currency would have "profound implications for monetary policy transmission and potentially for financial stability," she said. "All of those things require a lot of careful consideration."

Go deeper

6 hours ago - Politics & Policy

Rahm Emanuel floated for Transportation secretary

Rahm Emanuel. Photo: Joshua Lott for The Washington Post via Getty Images

President-elect Biden is strongly considering Rahm Emanuel to run the Department of Transportation, weighing the former Chicago mayor’s experience on infrastructure spending against concerns from progressives over his policing record.

Why it matters: The DOT could effectively become the new Commerce Department, as infrastructure spending, smart cities construction and the rollout of drone-delivery programs take on increasing economic weight.

6 hours ago - Politics & Policy

Biden turns to experienced hands for White House economic team

Illustration: Sarah Grillo/Axios

Joe Biden plans to announce Cecilia Rouse and Brian Deese as part of his economic team and Neera Tanden to head the Office of Management and Budget, sources tell Axios.

Why it matters: These are experienced hands. Unveiling a diverse group of advisers also may draw attention away from a selection of Deese to run the National Economic Council. Some progressives have criticized his work at BlackRock, the world's largest asset management firm.

Biden taps former Obama communications director for press secretary

Photo: Mark Makela/Getty Images

Jen Psaki, who previously served as Obama's communications director, will serve as President-elect Joe Biden's press secretary, the transition team announced Sunday.

The big picture: All of the top aides in Biden's communication staff will be women, per the Washington Post, which first reported Psaki's appointment.