Categories: Finance

Jerome Powell: “digital currencies of the Central Bank should function together with regular money”

Jerome Powell:

US Federal Reserve Chairman Jerome Powell announced the need to launch state digital currencies, which should function together with fiat currencies.

He stated this in his speech at a conference on virtual payments, organized by the Basel Committee on Banking Supervision. According to Jerome Powell, government digital currencies must coexist with cash in innovative payment systems for flexibility. Moreover, not only the public, but also the private sector should participate in improving the global payment system. Powell said the Fed’s Board of Governors is experimenting with the government’s digital currency, along with the Boston Federal Reserve Bank and the Massachusetts Institute of Technology (MIT).

Last fall, the Central Bank of the Bahamas launched its own digital currency, the Sand Dollar, to improve payment efficiency and lower costs. And the People’s Bank of China (PBOC) has already tested the digital yuan in various cities on several occasions. European Central Bank President Christine Lagarde suggested that the digital euro could be “released” in the next four years.

However, Powell has said more than once that the United States will not rush to release the digital dollar, since the US state currency has the status of an international reserve currency. Developing a central bank’s digital currency is not the top priority for the United States, even if other countries are working hard in this direction. Powell also said the Fed is serious about launching the digital dollar. Therefore, in 2021, the Fed will actively interact with the public on this topic and discuss the issue of launching a digital dollar with Congress. Before launching a government stablecoin, it is necessary to conduct thorough research and assess all possible risks.

Powell probably now sees the need to accelerate this process, as digital currencies from central banks can strengthen government oversight of the financial sector.

Telegram channel!