Fed still undecided about digital dollar, says Chair Jerome Powell

Fed still undecided about digital dollar, says Chair Jerome Powell

Although the United States Federal Reserve continues to evaluate the possibility of creating a digital currency, it says that it has yet to make a decision.

Powell spoke at a news conference Wednesday to say that the Federal Reserve is studying the merits and plans to issue a paper about the subject.

Powell said, while answering questions at the news conference: “We are working proactively to issue a CBDC, and if so in what form,” adding:

“We believe it is our responsibility to do the necessary work on both public policy and technology in order to make an informed decision. When evaluating a central bank’s digital currency or other digital innovations, the ultimate test is whether there are clear and tangible benefits that exceed any risks and costs.

Powell stated that the Fed wasn’t in hurry to follow the trend despite several central banks having their own CBDCs.

The Fed Chair stated that speed is not the goal, but getting things done right. He also said that the U.S. wasn’t behind in CBDC innovation.

CBDCs are now prominent in the anti-crypto narrative that global banking regulators and policymakers have embraced.

Cointelegraph reported that HSBC recently endorsed CBDCs against cryptocurrencies, and stablecoins.

Related: Fed Governor says CBDCs are still a’solution in search of a problem.

Crypto critics in Washington, like Senator Elizabeth Warren, have called for CBDCs to be “legitimate digital money” as opposed to crypto, which the Senator is known to denounce.

James Mackintosh, Wall Street Journal columnist, argued earlier in September that CBDCs could lead to “deeply negative interest rate.”

Chris Waller, Fed Governor, has previously opposed CBDCs’ value proposition calling them “a solution to a problem”.

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