TL;DR:
- The Federal Reserve Bank of San Francisco is hiring software developers to help research and design a central bank digital currency (CBDC).
- The bank is looking for a Senior Application Architect, Lead Application Developer, and Senior Application Developer for digital currency.
- A CBDC is a tokenized version of a country’s fiat currency that is issued by a central bank like the Federal Reserve.
The Fed is looking at CBDC
The Federal Reserve Bank of San Francisco is looking for software developers to help research and design a central bank digital currency (CBDC). The bank has posted three job listings on its Federal Reserve System Careers website, looking for a Senior Application Architect, Lead Application Developer, and Senior Application Developer for digital currency.
One of the job listings is for a “Senior Application Architect – Digital Currency,” and it was posted to LinkedIn less than a day ago. After capturing attention across the crypto space, it has already received 23 applicants. The Senior Application Architect will play a critical role in both designing a CBDC and overseeing its development, according to the job post. The architect will be responsible for both mentoring engineers and developing roadmaps that “balance tactical and strategic needs” related to the project. One of the position’s qualifications is experience working with digital payment systems, cryptocurrencies, or other CBDCs.
The positions
The Lead Application Developer and Senior Application Developer positions are intended to “implement example systems related to a Central Bank Digital Currency” and will be paid up to $215,400 and $176,300, respectively. All three positions are based in San Francisco. The Senior Application Architect role lists a salary range of between $134,900 and $215,400.
A central bank digital currency is a tokenized version of a country’s fiat currency that is issued by a central bank like the Federal Reserve. Similar to stablecoins, a CBDC’s value tracks that of a currency issued by a government like the U.S. dollar. But instead of being managed by private companies, a CBDC is issued by a central bank. A growing number of countries throughout the globe are either developing a CBDC or actively piloting one, according to the American think tank the Atlantic Council. The think tank’s website notes that 114 countries representing over 95% of global GDP are exploring a CBDC.
Countries already involved
Seventeen countries, including Russia and China, are currently piloting a CBDC, while 33 nations are developing one, such as the U.S. and Japan, which announced last Friday that its CBDC pilot program will launch in April. 11 countries have fully launched a CBDC, including the Bahamas and Nigeria.
The Fed has contemplated a CBDC since 2017, and a pilot program for U.S.-based financial institutions launched in New York in November, where banks said they would work closely with the Federal Reserve Bank of New York on testing a digital currency platform. The platform is referred to as the Regulated Liability Network (RLN) and is a proof-of-concept that includes participants like Mastercard and Wells Fargo. However, the project only uses simulated data, where digital tokens represent customer deposits, and “is not intended to advance any specific policy outcome” on CBDCs, the group stated.
The symposium co-hosted by the San Francisco Fed in September discussed CBDCs and whether the U.S. could be leaning into the technology because of FOMO—fear of missing out—according to Federal Reserve Chief Innovation Officer Sunayna Tuteja. During the chat, Tuteja said a U.S CBDC could bring some benefits, including improving financial inclusion and reducing fraud, but also highlighted some challenges, such as privacy concerns and the need for a secure and resilient system.
Main Concerns
One of the main concerns that have been raised by central banks around the world is the potential impact of a CBDC on the existing financial system. A digital currency could disrupt the traditional banking sector, changing the way that banks and other financial intermediaries operate. This could lead to significant job losses, as well as potential risks to financial stability if consumers were to shift their deposits away from traditional banks.
Despite these concerns, many central banks are actively exploring CBDCs, with some countries such as China already in the advanced stages of testing their digital currencies. The Federal Reserve has been conducting research into the topic for several years, and a recent report from the central bank highlighted the benefits and challenges associated with a potential U.S. CBDC.
At this stage, it is still unclear whether the U.S. will move forward with a CBDC. The Federal Reserve has indicated that it is in no rush to launch a digital currency, and it will continue to monitor the development of CBDCs around the world to determine the potential benefits and drawbacks of such a system. However, as other countries move forward with their own digital currencies, the pressure on the U.S. to keep up could increase, leading to a potential shift in policy.
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