Federal Reserve Chairman Jerome Powell shared the progress of the Fed’s work on a central bank’s digital currency (CBDC), the digital dollar. “We are actively working to evaluate whether we will issue a CBDC and if so, in what form,” he said, adding that he does not believe the United States lags behind other countries in the region.
Fed Chairman Jerome Powell on the progress of the US CBDC
Fed Chair Jerome Powell told CNBC on Wednesday that the US Federal Reserve has not decided whether to introduce digital dollars.
He was asked to update the Fed’s work on the central bank’s digital currency (CBDC). “We think it is really important that the central bank maintains a stable currency and payment system for the benefit of the people. That’s one of our jobs, “Powell began. “We also live in a time of variable innovation around digital payments and we need to ensure that the Fed can be able to provide the public with a stable and reliable currency and payment system.”
He continued: “There are massive personal innovations – many of which are happening outside of regulatory scope. Innovation is extraordinary. Our economy depends on innovation. The chairman of the Federal Reserve added:
So, with this in mind and with the creation of numerous personal currencies and currency-like products, we are actively working to evaluate whether or not to issue a CBDC and if so, in what form.
Powell commented: “We are looking forward to publishing a discussion paper soon, which will be the basis for engaging various groups, including elected government officials, in these issues, during public engagement. We feel it is our obligation to work on technology and public policy to create a foundation for making informed decisions. ”
He added: “The final test we will apply when evaluating the central bank’s digital currency and other digital innovations is that the obvious valuable benefits outweigh any costs and risks.”
The Fed Chair spoke to the CBDC about the Fed’s current work:
We have two really broad disciplines, one of which is really technology, both on board and the Federal Reserve Bank of Boston’s MIT.
“We are currently investing heavily in the United States to create a new settlement system for instant payments. We, the consumer, find it quite mandatory for businesses and have only found the issue of ensuring access to the payment systems of all financial institutions.
Powell concluded: “So, bottom line, we haven’t made any decisions about CBDC, but we’ll be issuing a discussion paper soon to lay the groundwork for our public interaction.”
Currently, 81 countries are trying to issue their own digital currencies, according to CBDC Tracker at the Atlantic Council’s Geo Economics Center. Some countries have already issued a CBDC, including China, which is extensively testing its digital yuan.
Powell was further asked if he was “at all concerned” that the United States was lagging behind the central bank’s digital currency. He replied:
I don’t think we are behind. I think it’s more important to do this right than to do it fast. We are the reserve currency of the world. I think we are in a good place to do that analysis and make that decision, which will be a government-wide decision.
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