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On Thursday, Jay Powell accelerated the Fed’s consideration of a digital version of the U.S. dollar that might be controlled by the U.S. Central Bank.
The Chairman of the Federal Reserve said that due to the pressure of some US lawmakers and the growing interest in the so-called “financial crisis”, it will solicit public comment on this idea. Central Bank Digital Currency (CBDC).
In the rare video statement Published Powell emphasized on the Federal Reserve’s website that digital currencies have potential benefits and pitfalls, and emphasized the growth of so-called stablecoins (private digital currencies pegged to the US dollar), which he said may pose a threat to the financial system.
He said: “The effective functioning of our economy requires people to have confidence and confidence not only in the U.S. dollar, but also in the payment networks, banks and other payment service providers that allow daily liquidity.”
“Our focus is to ensure a safe and efficient payment system that will not only bring broad benefits to American households and businesses, but also encourage innovation.”
The Federal Reserve has been considering the digital currency issued by the central bank, but compared with the monetary authorities of some other countries, people are skeptical about it. China is already experimenting with a digital renminbi.
Powell said that any CBDC should “as a supplement to cash and the current private sector digital form of U.S. dollars, not as a substitute, such as deposits in commercial banks.”
He said the Fed will publish a paper this summer to “promote a wide-ranging dialogue” and seek opinions on issues such as payments, financial inclusion, and privacy.
He added that the Fed will try to play a “leadership” in the evolution of international standards for international certification.
Powell stated that the Federal Reserve is closely monitoring payment innovation in the private sector, including the launch of Stablecoin And the price fluctuations of cryptocurrencies such as Bitcoin.
He said: “Considering other factors, the value of cryptocurrency fluctuates, cryptocurrency has not yet become a convenient payment method.” “Stable currency is designed to be used in a way that may improve payment efficiency, speed up the settlement process, and reduce end user costs. New technologies, but they may also bring potential risks to these users and the entire financial system.”
With the proliferation of stablecoins, he urged greater supervision, “including attention to private sector payment innovators who are not currently within the traditional regulatory arrangements adopted by banks, investment companies and other financial intermediaries.”
Powell said the upcoming discussion paper will mark “will be the beginning of a deliberate process” and vowed to hear “broad” voices before making any decisions.
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