The United States will not be issuing a digital dollar until the Federal Reserve resolves all questions around a potential central bank digital currency, or CBDC, according to the Fed’s chairman, Jerome Powell.<\/p>\n\n\n\n
Powell claimed that he is not worried about other countries having a first-mover advantage when it comes to issuing CBDCs.<\/p>\n\n\n\n
Speaking at a Monday panel on cross-border payments hosted by the International Monetary Fund, Powell said<\/a>:<\/p>\n\n\n\n “We have not made a decision to issue a CBDC, and we think there\u2019s a great deal of work yet to be done. […] In fact, I actually do think that CBDC is one of those issues where it\u2019s more important for the United States to get it right than it is to be first.\u201d<\/p><\/blockquote>\n\n\n\n Powell elaborated that \u201cgetting it right\u201d means that the U.S. is not only looking at the potential benefits of a CBDC but also the potential risks \u2014 particularly given the fact that the U.S. dollar is the world\u2019s reserve currency.<\/p>\n\n\n\n The official noted that countries around the globe will have their own motivations for issuing a CBDC. He contended that the main focus for the U.S. would be determining \u201cwhether and how a CBDC could improve an already safe and active dynamic domestic payment system.\u201d Powell continued:<\/p>\n\n\n\n “Unlike some jurisdictions, here in the United States we continue to see strong demand for cash. Moreover, we have robust and mature financial and banking sectors, and we have a highly banked population, so that many, although not all, already have access to the electronic payment system.\u201d<\/p><\/blockquote>\n\n\n\n The Fed chair emphasized that the bank will not make a decision on issuing the digital dollar until it resolves CBDC-associated risks involving cyber attacks, financial stability, privacy and security. He stated:<\/p>\n\n\n\n “In addition to assessing the benefits, there are also some quite difficult policy and operational questions. […] Just to mention a few, I would mention the need to protect a CBDC from cyber attacks and fraud; the question of how a CBDC would affect monetary policy and financial stability; and also, how could CBDC prevent illicit activity while also preserving user privacy and security.\u201d<\/p><\/blockquote>\n\n\n\n Powell\u2019s remarks come amid a number of global jurisdictions actively exploring and piloting CBDCs. Countries such as Russia<\/a> and Japan<\/a> are among the latest countries to jump on the CBDC bandwagon, while jurisdictions such as \u4e2d\u56fd<\/a> and Sweden<\/a> began testing their forthcoming digital currencies in 2020.<\/p>\n\n\n\n Despite the technology’s growing popularity across the globe, citizens in the U.S. are also skeptical about the idea of the digital dollar. According to a recent survey, more than 50% of Americans are opposed<\/a> to the U.S. Fed issuing such an asset. In late September, the Federal Reserve Bank of Cleveland revealed details of the Fed\u2019s ongoing research<\/a> into a potential digital dollar.(source: cointelegraph)<\/p>","protected":false},"excerpt":{"rendered":" The United States will not be issuing a digital dollar until the Federal Reserve resolves all questions around a potential central bank digital currency, or CBDC, according to the Fed’s chairman, Jerome Powell. Powell claimed that he is not worried about other countries having a first-mover advantage when it comes to issuing CBDCs. Speaking at …<\/p>\n