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In its 2022 white paper, the Fed argued that an intermediated CBDC would be most appropriate to ?facilitate the use of the private sector's existing privacy and identity?management frameworks; leverage the private sector's ability to innovate; and reduce the prospects for destabilizing disruptions to the well? ...

WASHINGTON, Sept 8 (Reuters) - The Federal Reserve's top regulatory official said on Friday the central bank is "a long way" from any decision on whether it would issue its own digital currency, and added it would not do so without official support in Washington.

RBI defines CBDC as a legal tender issued by a central bank, in a digital form. It will be akin to existing fiat currency issued by the central bank and would continue to perform the same functions i.e., as a safe store of value, a unit of measure and as a medium of payment.

Arguments for a US CBDC are the need to provide electronic payment services to underbanked individuals, the need to provide interoperability and stability to emerging private electronic systems, and, in the case of wholesale payments systems, the possibility of improving cross-border payment services.

Why is the Federal Reserve considering a CBDC now? The Federal Reserve is charged with promoting monetary and financial stability and the safety and efficiency of the payment system and is studying how a CBDC could improve on an already safe and efficient U.S. domestic payments system.

Executive Order 14067, officially titled Ensuring Responsible Development of Digital Assets, was signed on March 9, 2022, and is the 83rd executive order signed by U.S. President Joe Biden. The ultimate aim of the order is to develop digital assets in a responsible manner.

CBDCs are not a payment mechanism, but rather a form of currency and a digital means of storing value. FedNow, however, is a payment mechanism ? in other words, it's a means of moving funds from one bank account to another.