(Reuters) – A so-called “wholesale” central financial institution digital forex might maintain promise for the longer term settlement of sure monetary market transactions and processing worldwide funds, Federal Reserve Governor Michelle Bowman mentioned on Tuesday.

Whereas a digital greenback might make sense for interbank transactions, there could possibly be unintended penalties like disruptions to the banking system if the Fed had been to design a central financial institution digital forex that will be straight obtainable to the general public, Bowman mentioned in ready remarks for an occasion at Georgetown College’s Psaros Heart for Monetary Markets and Coverage.

The U.S. central financial institution has not but mentioned if it might embark on an effort to create a central financial institution digital forex, and has beforehand mentioned it might search authorization from Congress and the manager department earlier than doing so.