Fed veteran Lorie Logan: Central bank digital currencies may lead to larger balance sheets

Lorie K. Logan, who has recently been named as the next President and CEO of the Dallas Fed, believes central bank digital currencies ("CBDCs") could lead to larger central bank balance sheets, she said in a prepared speech at the New York Fed and Columbia SIPA workshop on monetary policy implementation released Thursday. Note that Logan is currently the New York Fed's executive vice president, managing the $9T System Open Market Account. Her role in the Dallas Fed will commence on August 22. "Depending on how it is constructed, central banking digital currencies could lead to larger central bank balance sheets, and more challenges to the control of interest rates," Logan highlighted. A CBDC is designed to be a digital form of a country's fiat currency issued by a central bank, rather than by a commercial lender. Separately, "digital innovation in money and payments could force central banks to overhaul how they conduct