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Economic Brief

May 27, 2021

Richmond Fed Research Looks at Platforms Issuing Digital Currencies

Several factors could go into why platforms such as Facebook are exploring issuing their own digital currencies, according to the Richmond Fed’s latest Economic Brief. These factors have implications on the central bank’s welfare calculation.

According to economist Russell Wong and economic writer Tim Sablik of the Richmond Fed and Jonathan Chiu, director at the Bank of Canada, factors for issuing digital currencies include inflation, the cost of creating the currency and the market share of the platform issuing the currency.

The Richmond Fed’s Economic Brief series provides essays on economic issues and trends. Sign up to receive an email notification when a new essay is posted.

As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District — including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia — to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.


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