Sept 30 (Reuters) – The U.S. Federal Reserve board will soon issue a hotly-awaited report exploring the potential adoption of a digital dollar, but with its governors and other policymakers divided on the issue – and with so much at stake for the financial industry – the central bank will likely tread carefully.

Worried that an explosion in cryptocurrencies could weaken their grasp on the economy, central banks from China to Europe are exploring issuing their own digital currencies (CBDCs), and the Fed is under growing pressure to catch up.

Unlike cryptocurrencies which are typically run by private actors, or the electronic money used in billions of transactions daily that is mostly created by commercial banks, some CBDCs would be equivalent to cash, issued and backed by central banks.

CBDCs could be issued for wholesale use, speeding up and reducing the cost of cross-border payments between corporations, and expediting the settlement…

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