Kenneth Arrow, the outstanding American economist and Nobel laureate, once wrote: “Virtually every commercial transaction has […] an element of trust.”[1] More than a decade ago, we were faced with the very real possibility of observing what happens when economic trust is lost: the Global Financial Crisis. For my part, I was more than just an observer at that time.
Given the dollar’s important role, it is essential that the Federal Reserve remain on the frontier of research and policy development regarding CBDCs. As part of this research, central banks are exploring the potential of innovative technologies to offer a digital equivalent of cash.