Fed to release paper on central bank digital currency soon, Powell says by Reuters

ছবি Photo from Reuters file: Federal Reserve Chairman Jerome Powell testified during a hearing at the U.S. House Oversight and Reform Select Subcommittee on Capitol Hill in Washington, DC, June 22, 2021.

By Jonnelle Marte

(Reuters) – Federal Chairman Jerome Powell said Wednesday he would publish a “soon” study examining the cost and benefits of the central bank’s digital currency, or CBDC.

“We are actively working to evaluate whether we will issue a CBDC and what form it will take,” Powell told a news conference after the last two days of the US Federal Reserve’s policy meeting.

The final test that will be applicable when evaluating the CBDC, he told reporters, if there are “clear and practical advantages that outweigh any costs and risks.”

The Fed chief said the paper, announced in May, would address some of the public policy issues that could be resolved through the CBDC.

The central bank is also conducting other research on the subject, including a multi-year research project with the Boston Fed Massachusetts Institute of Technology to explore technology that could be used for a CBDC. The Fed will seek input on this from the public and elected officials, Powell said.

A digital currency issued by the central bank will be different from cryptocurrencies like bitcoin, which can be decentralized and fluctuate widely in value. Although the exact structure has not been decided, the CBDC can give it to the person or business that claims it directly to the central bank, such as physical cash.

Fed officials are divided over the CBDC’s needs. While some, including Fed Governor Leal Brinard, say the United States needs to be a leader at a time when other large economies like China are moving more aggressively, Fed Vice Chairman Randall Quares and others are more skeptical that the benefits will outweigh the costs.

“So the bottom line, we didn’t decide,” Powell said Wednesday.

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