Governor Michelle Bowman said it is “difficult to imagine a world” where the benefits of a central bank digital currency (CBDC) can justify the “unintended consequences.”

However, she added that the U.S. should not stop considering the potential development of a CBDC and continue working with relevant international bodies like the Bank for International Settlements, the Financial Stability Board and the G7 to determine the best course of action.

Bowman, who is a member of the Federal Reserve’s board of governors, made the comments during a speech at Georgetown University on April 18.

She defined CBDCs as digital liability issued by a central bank in the form of its national currency like the dollar or pound — but she added that this is where the baseline definition ends and not all CBDCs necessarily have to be built on a distributed ledger system.

(by Assad Jafri)