Fed Still Mulling Over The Possibility Of A Digital Currency – Chairman Jerome Powell
The US Federal Reserve is still interested in creating a Central Bank Digital Currency (CBDC) but is yet to make a final decision on when and how the project will be undertaken. That’s according to a recent opinion by Jerome Powell. Powell acts as the chair of the Federal Reserve body. He made his opinions known during a panel call hosted by the IMF to mark its annual general meeting.
Better Get It Right Than Be First
During the session, Powell said that the US is surely working on a plan to strategically approach the CBDC issue, adding that it’s better to make sure they get it right than rush to be the first.
On that, he added that the Federal Reserve is carefully evaluating all the risk factors and benefits associated with the issuance of a CBDC, and therefore the body is yet to make the final call.
Most Central Banks Are Already Interested
The US Federal Reserve isn’t the first government-oriented body to contemplate the issuance of CBDC. Central banks from countries all the world are already interested in developing their own local CBDC. In fact, countries like Sweden began toying with the idea way back in 2017.
According to Powell, the main reason for central banks being interested in CBDC is the opportunity to streamline payments. This means that CBDC isn’t meant to replace fiat, but rather to complement the local currencies in making payments easier.
Change Of Heart
For years, the US Federal Reserve wasn’t exactly cozy to the idea of digital currency. However, things seem to have sharply turned positive after Facebook tabled a proposal to develop its own crypto named Libra that would serve as a mainstream means of payment.
Perhaps the FED realized that the idea is actually workable on a larger scale and moved to capture the opportunity.