Federal Reserve Chairman Jerome Powell has released an update on the progress of a digital dollar. He acknowledged that this was a "very high priority project" for the Fed and agreed with US Treasury Secretary Janet Yellen on the benefits of issuing a digital dollar.
The Fed is carefully examining a digital dollar
Fed chairman Jerome Powell testified before the Senate Banking Committee on Capitol Hill Tuesday, the first of two days of Congressional testimony. He speaks to the House Financial Services Committee on Wednesday.
Senator Bill Hagerty asked for a digital dollar, referring to US Treasury Secretary Janet Yellen's remarks on the matter on Monday. She said, "I think it (the digital dollar) could lead to faster, safer, and cheaper payments, which I believe are important goals."
Powell first confirmed: "We are examining the question of whether we should spend a digital dollar very carefully." He noted that other central banks around the world are also considering issuing digital currencies because "technology is now making it possible and allowing private sector actors to develop their own quasi-money digital instruments."
The Fed chairman stated: “There are both technical and political issues that have to do with how we would do this.
I would say that we are committed to solving the technology problems and advising the public in a very transparent way with all interested constituencies in a very transparent way whether we should do this.
He emphasized, “We are the world's reserve currency and we have a responsibility to get this right. We don't have to be the first. We have to do it right. "
Powell emphasized, "This is something that we are putting time and effort into throughout the Federal Reserve System," Powell repeated, "We do research here on the board." In addition, he noted that the Boston Federal Reserve Bank worked with MIT to explore the area.
The Federal Reserve Chairman then approved the benefits Treasury Secretary Yellen had outlined on Monday. He added that the digital dollar "could also help with financial inclusion".
Even so, Powell warned, "At the same time, you want to avoid creating things that could be destabilizing or pull money out of the banking system. We want to be careful what the impact is." The Fed chairman concluded:
(It's a) very high priority project for us.
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