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                                                                Brainard explained that the Covid-19 pandemic highlighted
          Insider’sreport                                       the need for broad public access to "well-regulated" digital
                                                                monies.  "The  challenges  of  getting  relief  payments  to
            on payments                                         [unbanked and underbanked] households highlighted the
                                                                benefits of delivering payments more quickly, cheaply and
                                                                seamlessly through digital means," she said.

        Are crypto payments                                     Expected benefits of a CBDC include eliminating friction
                                                                in payments clearing and settlement, domestically
                                                                and across borders, and lower costs. "The introduction
        in the cards?                                           of  a  CBDC  may  provide  an  important  foundation  for
                                                                beneficial innovation and competition in retail payments
                                                                in the United States," Brainard said. She was insistent that
        By Patti Murphy                                         CBDCs "should complement and not replace currency and
        ProScribes Inc.                                         bank accounts."
        I                                                       Brainard also said a CBDC would eliminate many of
              remember when I first began looking into crypto-
                                                                the risks associated with private cryptocurrencies, like
              currencies. It was 2013 and Bitcoin, which some
                                                                Bitcoin, with backing by a central bank. In addition to the
              likened to the Beanie Baby craze, had skyrocketed in
              price from less than a penny per coin to just under
                                                                Bank of China) are considering moves to their own digital
        $100 in the space of about three years. The Green Sheet had   Fed,  several other  central  banks (including the  Central
                                                                currencies.
        asked me to look into this phenomenon for an article, so
        I purchased one Bitcoin to better understand the experi-  Visa, Mastercard, PayPal
        ence.
                                                                Meanwhile, Mastercard and Visa are moving to support
        I sold the coin when it hit $1,000, and Bitcoin since has   cryptocurrencies on their settlement platforms. Visa has
        swung wildly in value, between a few thousand dollars to   a pilot going that supports settlement in USD Coin, a
        more than $60,000. Had I held onto that $100 investment,   stablecoin backed by the U.S. dollar. Mastercard stated it
        it would be worth a bundle today. So, I see the appeal of   has similar plans in the works.
        cryptocurrencies as investments. But I don't quite get the
        appeal of transacting in cryptocurrency.                "Our philosophy on cryptocurrencies is straightforward:
                                                                it's about choice," Raj Dhamodharan, Mastercard executive
        Yet, if  recent headlines  are  an  indication,  the    vice president for blockchain and digital asset products
        mainstreaming of cryptocurrencies is happening. It may   and partnerships, wrote in a recent blog post. "Mastercard
        not be as commonplace as cash, cards or even checks, but   isn't here to recommend you start using cryptocurrencies.
        crypto payments are in the cards.                       But we are here to enable customers, merchants and
        Both   Visa   and   Mastercard   are   interested  in   businesses to move digital value – traditional or crypto –
        cryptocurrencies. So are fintech disruptors like PayPal.   however they want."
        And central banks, too.
                                                                PayPal  is  gung-ho  on  cryptocurrencies,  too.  In  2020,
        Fed report due out in summer                            the company revealed consumers can use their PayPal
        In remarks before a crypto conference in May 2021,      accounts to buy, sell and hold four of the most popular
        Federal Reserve Board Governor Lael Brainard said the   cryptocurrencies in increments as low as $1. In March of this
        Fed is "stepping up" research and public discourse on the   year, PayPal introduced Checkout with Crypto, allowing
        role of central bank digital currencies (CBDCs)—that is   consumers to pay merchants using cryptocurrencies.
        cryptocurrencies backed by the Fed. As a first step, the   Checkout with Crypto appears alongside other methods
        Fed plans to publish a "discussion paper" this summer that   in a consumer's PayPal wallet and can be used when they
        lays out its thinking, with a focus on benefits and risks,   have sufficient crypto balances. Merchants can accept
        she said.                                               crypto payments with no additional fees or integrations,
                                                                PayPal said.
        Additionally,  the  Federal  Reserve Bank  of Boston  is
        building a hypothetical digital currency platform with   Dan  Schulman,  PayPal president and CEO, said he
        help from the Massachusetts Institute of Technology. And   sees Checkout with Crypto "driving mainstream
        the Atlanta and Cleveland Fed Banks are exploring how   adoption of cryptocurrencies." He added that enabling
        CBDCs can bolster financial inclusion. About 5 percent   "cryptocurrencies to make purchases at businesses around
        of American households are unbanked, according to the   the world is the next chapter in driving the ubiquity and
        Federal Deposit Insurance Corp.; about 20 percent are   mass acceptance of digital currencies."
        underbanked.                                            Patti Murphy is senior editor at  The Green Sheet  and self-described
                                                                payments maven of the fourth estate. Follow her on Twitter @GS_
                                                                PayMaven.
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