WSJ on the direction central banks are looking at in the future
The article was sparked by comments last week by Fed official William Dudley - when he dismissed talks about the Fed offering digital currencies, but he did say it was something they were thinking about.
They say central bank-issued digital money would be painless for those who want to use it. It could be accessed via accounts directly at the Fed, or more likely, from private banks in partnership with the central bank. The accounts would earn interest, which would allow the Fed to conduct monetary policy through interest-rate changes right at the consumer level, replicating the tools the central bank now uses via banks and money managers.
Of course, there are potential issues that may come with central banks opting for such a path. The article highlights privacy issues, hacking, and the fact that cash is still king as potential stumbling blocks in the idea.
When you think about it, as the world becomes more digitalised, and payments become more and more transacted via online means - it will only be a matter of time until cash gets phased out of most transactions.
At that point in time, then maybe we can start talking about digitalising currencies as well. But for now, we're still just not there yet.
