user costs. digital currencies, including central bank digital currencies ( cbdcs ), present opportunities but also risks associated with privacy, illicit activity, and financial stability. the introduction of bitcoin and the subsequent emergence of stablecoins with potentially global reach, such as facebook ’ s libra, have raised fundamental questions about legal and regulatory safeguards, financial stability, and the role of currency in society. this prospect has intensified calls for cbdcs to maintain the sovereign currency as the anchor of the nation ’ s payment systems. moreover, china has moved ahead rapidly on its version of a cbdc. with these important issues in mind, the federal reserve is active in conducting research and experimentation related to distributed ledger technologies and the potential use cases for digital currencies. given the dollar ’ s important role, it is essential that the federal reserve remain on the frontier of research and policy development regarding cbdcs. as part of this research, central banks are exploring the potential of innovative technologies to offer a digital equivalent of cash. like other central banks, we are continuing to assess the opportunities and challenges of, as well as the use cases for, a cbdc, as a complement to cash and other payments options. there continues to be strong demand for u. s. currency, and we remain committed to ensuring the public has access to a range of payments options. we have been conducting in - house experiments for the last few years, through means that 1 / 3 bis central bankers'speeches include the board ’ s technology lab, which has been building and testing a range of distributed ledger platforms to understand their potential opportunity and risk. this multidisciplinary team, with application developers from the federal reserve banks of cleveland, dallas, and new york, supports a policy team at the board that is studying the implications of digital currencies on the payments ecosystem, monetary policy, financial stability, banking and finance, and consumer protection. to enhance the federal reserve ’ s understanding of digital currencies, the federal reserve bank of boston is collaborating with researchers at the massachusetts institute of technology in a multiyear effort to build and test a hypothetical digital currency oriented to central bank uses. the research project will explore the use of existing and new technologies as needed. lessons from this collaboration will be published, and any codebase that is developed through this effort will be offered as open - source software for anyone to use for experimentation. the objectives of our research and experimentation across the federal

be on the goals and process determining the budget and on the importance, despite our increasing national security requirements, of regaining discipline in that process. these views are my own and are not necessarily shared by my colleagues at the federal reserve. * * * one notable feature of the budget landscape over the past half century has been the limited movement in the ratio of unified budget outlays to nominal gdp. over the past five years, that ratio has averaged a bit less than 19 %, about where it was in the 1960s before it moved up during the 1970s and 1980s. but that pattern of relative stability over the longer term has masked a pronounced rise in the share of spending committed to retirement, medical, and other entitlement programs. conversely, the share of spending that is subject to the annual appropriations process, and thus that comes under regular review by the congress, has been shrinking. such so - called discretionary spending has fallen from two - thirds of total outlays in the 1960s to one - third last year, with defense outlays accounting for almost all of the decline. the increase in the share of expenditures that is more or less on automatic pilot has complicated the task of making fiscal policy by effectively necessitating an extension of the budget horizon. the presidents ’ budgets through the 1960s and into the 1970s mainly provided information for the upcoming fiscal year. the legislation in 1974 that established a new budget process and created the congressional budget office required that organization to provide five - year budget projections. and by the mid - 1990s, cbo ’ s projection horizon had been pushed out to ten years. these longer time periods and the associated budget projections, even granted their imprecision, are useful steps toward allowing the congress to balance budget priorities sensibly in the context of a cash - based accounting system. but more can be done to clarify those priorities and thereby enhance the discipline on the fiscal process. a general difficulty concerns the very nature of the unified budget. as a cash accounting system, it was adopted in 1968 to provide a comprehensive measure of the funds that move in and out of federal coffers. with a few modifications, it correctly measures the direct effect of federal transactions on national saving. but a cash accounting system is not designed to track new commitments and their translation into future spending and borrowing. for budgets that are largely discretionary, changes in forward commitments do not enter significantly into budget deliberations, and hence the surplus or deficit in the unified budget is a reasonably accurate indicator of