FedCoin is shorthand used by economists, journalists, and policymakers for a potential U.S. central bank digital currency (CBDC) — a digital liability of the Federal Reserve that would function as a digital equivalent of physical cash. The term predates any official U.S. proposal and was popularized in policy commentary around 2014–2015, notably by economist J.P. Koning, to describe a Fed-issued token usable by households or firms.
Unlike commercial bank deposits, which are liabilities of private banks, a FedCoin would be a direct claim on the central bank, similar to a Federal Reserve Note. Proposed designs vary along two main axes:
- Wholesale vs. retail: whether access is limited to financial institutions or extended to the general public.
- Account-based vs. token-based: whether holdings are tied to verified identities or to cryptographic bearer instruments.
The Federal Reserve has not issued a CBDC. In January 2022, the Fed's Board of Governors published a discussion paper titled Money and Payments: The U.S. Dollar in the Age of Digital Transformation, which examined potential benefits (faster payments, financial inclusion, preserving the dollar's international role) and risks (disintermediation of banks, privacy, cybersecurity, monetary policy transmission). Chair Jerome Powell has repeatedly stated that the Fed would not proceed without clear support from the executive branch and authorizing legislation from Congress.
The policy debate intensified after China's pilot of the e-CNY and the European Central Bank's preparation phase for a digital euro, launched in October 2023. In the United States, opposition has come from parts of Congress concerned about surveillance and bank disintermediation; in January 2025, President Trump signed an executive order prohibiting the establishment, issuance, or promotion of a CBDC within U.S. jurisdiction.
FedCoin remains a conceptual placeholder rather than a concrete product, but it anchors a wider debate over the future architecture of money, the role of stablecoins, and sovereign control of payment rails.
Example
In its January 2022 discussion paper *Money and Payments*, the U.S. Federal Reserve formally invited public comment on whether to pursue what commentators had long nicknamed "FedCoin."
Frequently asked questions
No. The Federal Reserve has not issued a CBDC. It published a discussion paper in January 2022 but has stated it will not proceed without congressional authorization and executive branch support.
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