New York Federal Reserve Bank President John Williams believes the emergence of cryptocurrencies poses a significant challenge to existing regulations, highlighting the ongoing discussions policymakers are having about blockchain technology and central bank digital currencies, or CBDCs.
Before central banks like the Federal Reserve can issue their own CBDC, several major questions pertaining to blockchain technology and regulation need to be addressed, Williams told a panel hosted by the Bank for International Settlements. Specifically, Williams said policymakers need to outline how blockchain-based payment systems would function alongside physical cash.