Lorie Logan, Speech: Considerations on the Road Ahead for Monetary Policy Implementation

“The innovation occurring in money and payments has the potential to alter the existing two-tier monetary system upon which current monetary policy implementation frameworks are designed. How things evolve from here is uncertain, and the impact of these innovations could be revolutionary, or more evolutionary. But imagining an environment in which new forms of private and public money and payments could coexist is helpful in adapting implementation frameworks that will enable central banks to continue to achieve their desired policy stance in the future.

Expanding central bank liabilities in an incremental way to support new forms of money could create a safer payment system—one that promotes innovation, mitigates potential risks, and ensures money continues to function well in an increasingly digital economy. Adapting the implementation framework to incorporate new private forms of money and potentially central bank digital currencies is complex and will require substantial further study of key issues, some of which I have raised today.”