US Federal Reserve Chairman Jerome Powell said the US was in no rush to issue the digital dollar. It is much more important to develop regulation of stablecoins.
Speaking at an online conference hosted by Princeton University in New Jersey, Powell said the US government has no desire to be the first to launch a digital currency. This is not necessary as the US has already pioneered the creation of a reserve currency, the US dollar. Powell said the Fed is investing huge resources in researching the blockchain and the digital dollar, as well as studying their impact on legislation, politics and the economy.
However, issuing a government stablecoin may “take years, not months.” Powell acknowledged that the regulator began to study digital currencies of central banks due to the fact that the private sector had the opportunity to issue cryptocurrencies. The Fed chairman explained that people perceive cryptoassets as money, but due to the high volatility, they begin to realize that this is not at all the case and cryptocurrencies should be avoided.
Powell believes the Fed should focus on developing regulation for international stablecoins. Earlier, the Working Group on Financial Markets, formed under President Donald Trump, stated the need to control stablecoins according to the same regulatory rules that apply to traditional payment systems.
Powell said the Fed is not fixated on the potential risks of stablecoins and how they are managed, even though society has a right to think so. But investors and traders must be confident in the stability and security of the digital assets they are acquiring. Therefore, today the priority task of the Fed is to develop regulations governing activities with stablecoins, and not to issue its own digital currency.
Powell had previously said that private firms should not be involved in the development of the digital dollar, as the central bank is responsible for creating the money supply.
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