WASHINGTON -- The Federal Reserve on Thursday released a highly anticipated report on central bank digital currencies that suggested it is leaning toward having banks and other financial firms, rather than the Fed itself, manage digital accounts for customers.
A central bank digital currency would differ in some key ways from the online and digital payments that millions of Americans already conduct. It wouldn't necessarily require the user to have a bank account. The Fed's paper, while stressing that no final decisions have been reached, said it would likely follow an "intermediate model" for a digital dollar under which banks or payment firms would create accounts or digital wallets.
Such a government-issued digital dollar could have major consequences for commercial banks because many Americans might prefer to hold such currency in a "wallet" issued by a payment provider like PayPal or Venmo, potentially cutting into bank deposits. It would also compete with the burgeoning stablecoin market and could reduce the cost of financial transactions, particularly overseas remittances.
The paper released Thursday kicks off a 120-day comment period, during which the Fed will seek input from the public. Fed officials said the central bank has made no decisions about a digital currency or how it would work. The Fed said it would proceed only if Congress specifically passed a law authorizing a digital currency.
• • •
OMAHA, Neb. -- Union Pacific hauled in 24% more profit in the fourth quarter despite supply chain problems and weak auto production, but that is also compared with a period last year that included a one-time $278 million charge.
The Omaha, Nebraska, railroad on Thursday posted earnings of $1.71 billion, or $2.66 per share, in the last three months of 2021. That's up from $1.38 billion, or $2.05 per share, a year earlier. Without last year's charge, the railroad's profit would have been up 8% over the 2020 quarter's adjusted results of $1.6 billion, or $2.36 per share.
Union Pacific hauled 4% less freight in the fourth quarter as the computer chip shortage continued to hurt auto production and supply chain problems cribbed shipments of imported containers of goods. The railroad also wrestled with crew shortages as COVID-19 spread through its workforce.
• • •
North Carolina manufacturer to close, puts 475 out of workGREENVILLE, N.C. -- A North Carolina manufacturing plant which makes small engines for windshield wipers, electric windows and other car parts says it is shutting down, putting nearly 500 people out of a job.
DENSO Manufacturing told local economic development officials on Tuesday that layoffs at the Greenville plant will take place later this year and that it will close its doors by January 2023, news outlets reported. The move affects 475 workers, who were told on Tuesday of the impending shutdown.
Since 2019, DENSO's parent company has been reorganizing, said Brad Hufford, vice president of business development for the Greenville-ENC Alliance. Hufford said he believes that the decision to close the plant is a result of corporate streamlining.
The Japanese-owned facility opened as ASMO Greenville in 1995. In 2013, DENSO began a $50 million expansion that included an eight-year incentive agreement with Pitt County to add 200 jobs. The county paid the company more than $187,000 annually.